U.S. equities bogged down by sluggish earnings

"Pockets of value" remain, says Beutel Goodman's Glenn Fortin.

Sonita Horvitch 24 June, 2015 | 5:00PM
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Glenn Fortin, global equity analyst and portfolio manager at Beutel Goodman & Co. Ltd., says that the U.S. equity market has been a lacklustre performer so far this year, with the consensus that U.S. larger-cap corporate earnings per share will show little or no growth in 2015.

"The benchmark S&P 500 Index is essentially flat since the beginning of this year in U.S.-dollar terms," says Fortin. But interestingly, he says, the NASDAQ Index, which has heavy weightings in both the technology and the health-care sectors, has done modestly better, though its return is still in the single-digit range in U.S.-dollar terms. "These two key U.S. sectors have been strong performers so far this year."

A specialist in U.S. stocks and a value manager, Fortin notes that financial analysts have been downgrading their earnings estimates for 2015, reflecting in part the adverse impact of the strong U.S. dollar on U.S. companies with a global reach. "A large number of large-cap and mid-cap U.S. companies have significant international operations and the strong U.S. dollar is a headwind," he says.

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Sonita Horvitch

Sonita Horvitch  

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