Business Maverick: U.S. Big Cap Stocks Turn Into World’s Top Haven as Risk Rises

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Investors are scrambling for safety as risks mount, from the war in Ukraine to rising interest rates and a global recession. They have found it in the U.S. stock market -- particularly the biggest American companies.

The S&P 500 Index is up more than 8% over the past two weeks, recouping all of its losses since the Russian invasion on Feb. 24. Meanwhile, the tech-heavy Nasdaq 100 has gained almost 11% over the same span. With earnings looking strong and corporate outlooks improving, there are reasons to think these gains can hold despite the myriad risks facing global equities.

“The view is we should just rotate to sectors which are more favorable to the situation, because there’s really not much of an alternative to equities,” said Ilya Feygin, managing director and senior strategist at WallachBeth Capital.Large-cap stocks in the U.S. offer more safety and value than small- and mid-cap shares since they tend to generate reliable income for investors, especially companies that can maintain dividend payouts. In addition, the U.S.

“Stocks appear to have largely priced in near-term geopolitical and interest-rate risks,” Gina Martin Adams, chief equity strategist at Bloomberg Intelligence, wrote in a note. “Earnings forecasts are climbing again, as analysts get more comfortable with supply-chain risks and revenue estimates keep improving.”Investors also are finding comfort in American corporations thanks to the huge piles of cash on their balance sheets amassed during the pandemic. As a result, U.S.

 

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