The Bullish Case for U.S. Economy, U.S. Equities

BlackRock Vice-Chairman Bob Doll in today's WSJ:

"There is no question that we face formidable, long-term structural problems that make U.S. stocks less attractive for many investors. But I believe that the spirit of innovation and entrepreneurship that has defined America in past crises will prevail again and propel our markets forward. As such, overweight positions in U.S. equities are more than warranted.

Though housing is weak and debt and deficit levels are rising, compared to the rest of the world the U.S. is in reasonably good shape. Our economic fundamentals are sound: Manufacturing levels are up and interest rates and inflation are low. The broader economy's recovery is also finally translating into meaningful employment improvements—recent employment reports show increases in average hourly earnings and hours worked—and I believe this trend will continue.

When the markets faltered in 2008 and revenue growth stalled, U.S. companies moved decisively to cut costs—unlike their European and Japanese counterparts. Now that recovery has taken hold, businesses are replenishing inventories and rehiring, corporations are expanding exports, and American consumers are responding better than most expected.
 
Potential risks—trade complications, escalating credit contagion, overly aggressive financial regulation, and tax increases—clearly remain. But for the moment, our nation seems poised to remain a City Upon a Hill."