Higher quality companies set to make a comeback

us overview

If last year was the year for smaller capitalisation companies in the US, this year is likely to see a return to favour of large cap firms with strong balance sheets, good fundamentals and a reliable visible earnings stream

As global economic recovery settles in, 2003 will long be remembered as marking the end of the longest lasting and deepest equity bear market since the Great Depression. Despite valid concerns over the amount of consumer and government debt, leading economic indicators suggest a momentum of recovery that has exceeded even the most bullish expectations. After a setback related to the commencement of war with Iraq, the year was marked by better-than-expected earnings due to exceptional productivity and modest revenue growth. As is the usual case after a major bear market low, investors' ri...