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9 Dec, 2010, 01.01AM ,REUTERS
US stocks to outperform emerging mks in '11: Analyst
NEW YORK: US stocks will outperform emerging markets in 2011, with energy and materials shares leading gains, said Richard Bernstein, chief investment strategist at Richard Bernstein Advisors.
"Emerging markets are now leading the world in negative earnings surprises and remain very expensive," Bernstein said in an outlook for 2011 sent to clients
The MSCI Emerging Market Index is up 15.9 percent for the year compared with a 11.9 percent gain on the S&P 500, but the US benchmark index has outperformed the MSCI BRIC index, which follows stocks from Brazil, Russia India and China, up 8.7 percent.
Bernstein also noted that with the economy beginning to enter the mid-phase of the economic cycle, energy and materials stocks will begin taking leadership positions.
Small-cap and mid-cap stocks, which have outperformed the wider market and large-cap stocks this year, will continue to be favored in 2011, he said.
Bernstein said the US dollar will appreciate in 2011, which could pressure equities. The dollar has risen 2 percent so far in 2010.
He also said longer-term Treasury rates could rise by more than 150 basis points.
"Our quick review of longer-term interest rates suggests that they typically increase during the mid-phase by between 200 and 300 basis points. Even assuming weaker-than-average growth next year, longer-term rates are likely to rise substantially."
Other trends for 2011 include stocks outperforming bonds as the US economy continues to expand and as normal upward pressure on longer-term interest rates becomes more apparent.
Bernstein had a negative outlook on gold prices, which touched a new high this year, but gave a positive outlook on US consumer stocks compared to emerging market issues.
US stocks to outperform emerging mks in '11: Analyst
NEW YORK: US stocks will outperform emerging markets in 2011, with energy and materials shares leading gains, said Richard Bernstein, chief investment strategist at Richard Bernstein Advisors.
"Emerging markets are now leading the world in negative earnings surprises and remain very expensive," Bernstein said in an outlook for 2011 sent to clients
The MSCI Emerging Market Index is up 15.9 percent for the year compared with a 11.9 percent gain on the S&P 500, but the US benchmark index has outperformed the MSCI BRIC index, which follows stocks from Brazil, Russia India and China, up 8.7 percent.
Bernstein also noted that with the economy beginning to enter the mid-phase of the economic cycle, energy and materials stocks will begin taking leadership positions.
Small-cap and mid-cap stocks, which have outperformed the wider market and large-cap stocks this year, will continue to be favored in 2011, he said.
Bernstein said the US dollar will appreciate in 2011, which could pressure equities. The dollar has risen 2 percent so far in 2010.
He also said longer-term Treasury rates could rise by more than 150 basis points.
"Our quick review of longer-term interest rates suggests that they typically increase during the mid-phase by between 200 and 300 basis points. Even assuming weaker-than-average growth next year, longer-term rates are likely to rise substantially."
Other trends for 2011 include stocks outperforming bonds as the US economy continues to expand and as normal upward pressure on longer-term interest rates becomes more apparent.
Bernstein had a negative outlook on gold prices, which touched a new high this year, but gave a positive outlook on US consumer stocks compared to emerging market issues.
