“Bob Doll, chief equity strategist at Nuveen Asset Management, says it’s finally full steam ahead for the U.S. economy — he is looking for 4 percent GDP growth in the second quarter, as the restraints from a harsh winter melt away.
In his weekly market commentary, Doll sees a host of reasons why he thinks the U.S. economy is gaining momentum.
Among them, he mentioned “significantly less fiscal drag” from the federal government, higher state and local government spending and an improving trade picture.
“A lagged impact of Fed stimulus is lifting the money supply and bank loans,” Doll said. “Consumer deleveraging headwinds and severe weather are behind us. The impacts of both the manufacturing and energy renaissances are broadening.”
Doll is heartened by the fact that first-quarter earnings marked the third consecutive quarter of higher corporate revenue and earnings per share growth.
“Several reasons support our view that second-quarter GDP growth will exceed 4 percent — decline in initial unemployment claims, increases in service sector activity, higher weekly mortgage applications and a solid rise in home prices.”
Doll mentioned two potential areas of concern, however.
First, he noted, U.S. corporate taxes are the highest in the developed world. “As the only industrialized country to double tax foreign sources of profits, U.S. companies may re-incorporate businesses outside the country to reduce the tax burden,” he warned.
Second, while he likes the fundamentals in the U.S. economy, Doll said the technical picture of the United States might not be as healthy at the moment….”
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