One Analyst Compared US Stocks To European Stocks – Here’s What He Found
So one of the things we (and others) noted going into the first round of the French elections was that investors and traders were hardly bearish on anything European.
"Overweight" European equities was on everyone's reco list, € credit was (still) asleep at the wheel despite sovereign spreads' best efforts to convey redenomination risk, and as for the perceptible hedging in the euro, well it was just that - hedging. Which meant a whole lot of people were long (see here for more than you ever
Hardly bearish on anything? What about the currency? Vols were bid up no?
read this: https://heisenbergreport.com/2017/04/22/youre-gonna-frighten-people-bill-murray-does-frexit/
Well from what I understand the US can hold these valuations because the interest rates are so low. Much higher in Europe…no wait.
While Eurozone stocks seem notably “cheaper” than US stocks, it seems to me that the leading EZ stocks and the leading US stocks, say the S&P 100 really do a lot of their business in the other guys’ backyard. The companies aren’t that different. Nestle, Unilever, Philips, etc. get a huge proportion of their business in the US, just as P&G J&J and other drug stocks, and other consumer companies do in Europe. The biggest US and the biggest Euro stocks are all really global stocks doing major business in all parts of the world. Euro stocks may be cheaper but retail customers pay scant attention to which of the two groups act better after currency adjustments and interest rate differences. As much as I want to love many of the big Euro stocks, I’ve never seen them produce superior net long-run returns compared to US equities.