3 Reasons to be optimistic about US stocks

JP Morgan Funds says that “Despite weak 1Q results, earnings should rebound as macro headwinds subside” so “there are still reasons to be optimistic about equities.” Why? 1) Earnings should stabilize as macroeconomic headwinds of a lower oil price and rising USD abate. 2) Despite the dollar, multinationals and large-cap stocks are still attractive. Favoring less USD-sensitive stocks, such as small caps, was a consensus trade going into 2015, one that we believe was overdone. 3) Higher dispersion levels are creating opportunities for active managers. There are clearly over and undervalued areas of the market, leading to sector-rotation opportunities. (VIEW LINK)

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