U.S. Corporate Profitability-Support on the Margin
August 27, 2009
Henry McVey
Although U.S. corporate earnings have dropped steeply since the start of the Great Recession, net margins for non-financial firms (i.e., the "real economy") have been surprisingly resilient compared to previous economic downturns.
In his latest article, U.S. Corporate Profitability-Support on the Margin, Henry McVey outlines his most recent findings on this matter, arguing that the buoyant profitability of U.S. corporations suggests that investors would benefit from considering equity exposures that are, at a minimum, neutral weighted.
Henry also posits that a tactical overweight to equities as a means to capture both market momentum and this "improved" profitability should not be ruled out.
To discuss the ideas presented in this paper, please contact your relationship manager or e-mail us at info@morganstanley.com.
For other MSIM publications and more information on our Thought Leadership series, please visit: www.morganstanley.com/im/leadership
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