BlackRock Has It Wrong on U.S. Stocks, Russell Investments Says
- European equities are clear preference over U.S.: Sturkenboom
- Washington fiscal stimulus seen as risk to valuation multiples
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A difference of opinion is what makes a market -- and BlackRock Inc.’s bullish case for U.S. equities over their European counterparts last week has prompted a rebuttal from Russell Investments, which argues the world’s largest money manager has got it the wrong way round.
The strong earnings momentum in U.S. stocks championed by BlackRock is actually a cause for concern to Russell’s Wouter Sturkenboom, senior investment strategist at the $297 billion asset manager. It raises the hurdle for positive profit surprises and the earnings revisions ratio highlighted in the BlackRock note doesn’t have a great track record as a leading indicator of returns, he said.