MarketSaga

Saga of Financial Markets

Tue01162018

Last updateSat, 29 Jul 2017 12am

Back You are here: Home Market Market Update Insight It may be time to take a second look at US equities

It may be time to take a second look at US equities

It may be time to take a second look at US equities especially the large cap stocks. Why?  Three reasons:

First, is the impact of the interest rate cut. Normally, it would take about 6~9 months for the impact of interest rate cut to be felt. The first interest rate cut was in Sept 28, 2007. It is almost 8 months pass now, the impact of the rate cut should be seen in next couple of months.

Secondly, US is the most mature financial market in the world. That is, if we were to compare US market volatility against the emerging markets, US market would appear to be less volatile, even as of today. As a matter of fact, in the recent market corrections, most of those emerging markets has fallen more than US market.

Thirdly, most of these large cap stocks e.g. General Electric, JPMorgan, Amgen etc, have at least 50% of their business derive from overseas markets. In short, most of these companies itself are very much diversified with its business exposure.