U.S. Profit-Growth Swing Signals It’s Time to Go Large
Earnings growth is going through a transition that favors shares of larger U.S. companies, according to David Bianco, chief investment officer and strategist for the Americas at DWS Investment GmbH. Bianco compared growth rates for the S&P 500 and Russell 2000 indexes after excluding unprofitable companies in a report Thursday. The S&P 500’s pace surpassed the Russell 2000’s in the fourth quarter after trailing in each of the first three quarters, according to data compiled by Bloomberg. The reversal is likely to last through midyear, based on analysts’ estimates.