NEW YORK (
Stephanie Link, co-portfolio manager of
Action Alerts Plus,
said that she "likes the U.S. market," noting that the Fed has been largely responsible for the growth the country is seeing.
Link pointed out that bank lending and housing are on the rebound and cited continued consumer resiliency, with healthy auto and retail sales. Companies continue to do more with less, and margins are not coming down, as the bears have thought. "That leads to better growth, and better corporate profits," Link said during her presentation. "If you can get a little bit better earnings, you could see a higher stock market."
Fund flows continue to be positive, with $91 billion into equity funds year-to-date, which is supportive of Link's thesis.
Not everything is great, though, Link noted. Jobs growth is still not up to where it should be, and manufacturing and ISM numbers have turned sluggish. If economic data does get better, TheStreet's chief investment officer said the Fed could start to taper soon. Although the markets would sell off on this news, Link said that would be a buying opportunity.
Procter & Gamble
(PG - Get Report)
Phillip Morris International
(PM - Get Report)
as defensive names that are worth watching, as consumer staples have pulled back in recent days.
Housing is still in the early innings, Link said. Permits are up 26% year over year, and inventories are at 10 year lows. Some 48 states saw price increases in the month of May, something that bodes well for the housing market in the future. If rates continue to rise in a gradual, controlled way, that's okay, she added. Housing is a huge component of GDP, currently at 5%, but its derivatives account for nearly 17% of GDP.
Link mentioned that she likes
Tile Shop Holdings
on a pullback, as the company benefits from housing refurnishings and renovation. It has 3% market share, and is under the radar of companies like
(HD - Get Report)
She also mentioned
, which recently went public at $21. The company, which restructured between 2005 and 2011, should benefit from the continued home renovation theme that's currently playing out.