Helmut Studer Looks Back on 2014

Bendern, Liechtenstein, January 20, 2015 (Newswire.com) - Despite the anaemic economic recovery in the US, it was another decent 12 months for American stock markets. Globalisation has resulted in the Dow Jones and the S&P becoming less a reflection of the state of the American economy as a whole, and more a reflection of American companies’ global reach. Many American corporations remained as profitable as ever, while ordinary Americans continued to struggle.

Nothing illustrates this better than the three-tiered American retail market, explains Michael Reid, a US Retail Analyst at Helmut Studer, an international financial advisory firm based in Liechtenstein. “At the bottom end, Dollar Tree paid a hefty premium to acquire Family Dollar back in July. Likewise, profits ticked up nicely at posh stores like Nordstrom.”

“However, catering to middle-income Americans remained tough,” adds Reid. “Sears is rapidly approaching its sell-by date, Target dealt with self-inflicted wounds and even Macy’s lost its shine.”

“The year’s largest IPO was a Chinese company – the online retail giant Alibaba, which chose to list on the New York Stock Exchange, and raised a record $25bn in September,” informs Alexander Hart, a Senior Portfolio Manager at Helmut Studer.  “Yahoo was an early backer, and got a much needed boost from cashing in a $9.5bn stake in the float, which also made Alibaba’s founder Jack Ma China’s richest person,” said Hart.

“It was also a year for transatlantic mergers and acquisitions, not all of which worked,” continued Hart, who has nearly a decade experience in portfolio management. “AbbVie got cold feet in October after offering something like $55bn for Shire Pharma, which would have been the largest deal anywhere in 2014,” Hart added. “The Chicago-based company blamed proposed changes to the US tax code after it proposed moving its HQ to Basingstoke to lower its tax bill,” he explained.

Oil prices have plummeted for seven months, leading to cheaper fuel at the pump for American drivers, but the short-term outlook for Exxon, ConocoPhillips, Chevron and the rest of the American oil industry is grim.

“Most of the Gulf of Mexico has shut down production, and the shale boom in North Dakota will follow suit if it hasn’t already,” said Spencer James, a crude oil expert employed at Helmut Studer.

The best-performing sector in US markets was healthcare, up about 20 per cent over the year. “The Affordable Care Act might have only marginally improved the American healthcare system, but profits at insurers remain in rude health,” the International Trading Director of Helmut Studer, Simon Harris said. “But the big year for healthcare is 2015, with a new Republican majority in the Senate and another potential gutting via the Supreme Court,” Harris concludes.

In tech, Google continued to morph from a “do no harm” idealist into a hard-nosed corporate master, although the recent European Parliament vote to break it up might make life a little more interesting in 2015.

All of this, and more, should make for a more exciting 2015.