U.S. markets appear reasonably valued in the current interest rate environment, but if rates finally rise then highly levered companies, as well as high yielding sectors like utilities, could face trouble, said Jaco Jordaan, CIO of HD Vest. Jordaan added that the biotech sector faces additional risks due to high valuations and potential misses on drug rollouts. Finally, Jordaan said international continues to look more attractive than U.S. markets on a valuation basis, noting that Europe could deliver an upside surprise in both growth and earnings if the ECB successfully delivers quantitative easing.
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