Three cheers for the red, white and blue. The latest Merrill Lynch poll reveals that fund managers are partial to American companies because they believe profits at home will likely be stronger than abroad.
According to the survey, “With the economic downturn spreading to the eurozone and certain emerging markets, investors are starting to view U.S. assets as attractive. The net balance of asset allocators overweight U.S. equities stands at 12 percent, its highest level in more than six years.”
”Supporting this view is the widely-held belief that the U.S. dollar is undervalued. A record net 58 percent say this month that the dollar is undervalued, while a net 71 percent say the euro is overvalued. Investors believe that the U.S. has a better corporate profit outlook and higher quality earnings than the eurozone.”
How should you trade?
I love American companies, Karen says. I’m bullish on Altria .
Johnson & Johnson is my trade, Pete says. They’ve outperformed the S&P and Russell 2000.
McDonald’s and Wal-Mart are probably the best America trades, Jeff says .