Why dollar strength and domestic names will drive the US

ON THE US

With the US economy picking up steam, investors should expect renewed strength in the dollar and better performance from domestically-facing stocks, argues Gautam Chadda, director of investment consulting at RBC Wealth Management.

Following the recent weather-related winter weakness, the US economy is picking up steam. Factors that were headwinds in the past are becoming tailwinds in 2014.  Household and bank capital building is now advanced, fiscal austerity is beginning to loosen its grip and households and the corporate sector are beginning to spend again after their post-crisis reluctance. In our view, these are likely to remain tailwinds for the next several years.  Dollar strength One beneficiary will be the currency.  A clearer path towards a normalised interest rate environment, and an improving bala...