After a terrible 2022 in the main, investors in US shares have seen their portfolios green up since the final weeks of last year as economic signs point increasingly to a relatively soft landing for the US economy. That has meant a rerating for the S&P 500 and the Nasdaq ahead of the big Wall Street earnings season, and although this should present investors with a decent set of opportunities, it is complicated by a few cyclical factors.
Firstly, the value rotation has continued for far longer than some expected due to the complications of Russia’s energy war on Europe – a host of US-based oil, gas and shale producers have enjoyed record years as tankers ship ever greater amounts of LNG and petroleum to keep Europe’s economies fuelled.
That does wonders for America’s balance of payments, making the country a net exporter of energy for the first time since the early 1970s: the balance of payments gap has narrowed by more than $21bn, according to the US Bureau of Economic Analysis.