Stock market leadership moves to Europe: Kleintop de Schwab
What would you like to know
- From the start of the year until Tuesday, the MSCI euro index gained 17.5% against 13.6% for the S&P 500.
- The gap since November, when news of a COVID-19 vaccine was announced, is even larger: 47% versus 30%.
- The EU is also expected to lead the US in economic growth and corporate profit growth for all of 2021.
Market leadership has shifted from the United States to Europe, according to Jeff Kleintop, chief global investment strategist at Charles Schwab & Co.
From the start of the year through Tuesday, the MSCI euro index has gained 17.5% on a total return basis in the United States, in dollars, compared to 13.6% for the S&P 500, Kleintop said. during a recent Schwab Market Outlook webinar.
The gap has been even larger since November, when news broke that there would soon be a COVID-19 vaccine ready for distribution: a gain of 47% for the MSCI Euro index against 30% for the S&P 500, even if Europe is lagging behind the United States. on the distribution of vaccines against the coronavirus but is catching up.
Europe is also catching up on economic growth as restrictive lockdowns end, the European Central Bank steps up bond purchases and the European Commission begins rolling out its biggest stimulus package, worth $ 910 billion.
“The peak of economic momentum in the eurozone may not arrive until the end of the year,” Kleintop said, adding that US growth is peaking now and that of China has peaked at the end of the year. last year.