US/eurozone gap returns to 03 levels

Europe continues to de-rate while US valuation multiples are supported by Fed's actions

Europe has continued de-rating in recent months and the gap between the US and eurozone is back to the 2003 levels, according to Sloane Robinson. Rupert Dyson, manager of the SR European investment trust, said this is most likely due to the decline in the dollar and aggressive actions taken by the Fed compared to the ECB, which has helped support US valuation multiples. "Additionally, there appears a growing disconnect between bottom up earnings estimate changes in Europe and investors' belief in these numbers," he added. "It is now quite commonplace for managers to believe the US is ...