US vs Europe: Is this the buying opportunity of a generation?

US v EUROPE

Technical analysts have noticed a strange pattern in recent weeks: European markets are dismal, pulling down the US market as it opens. Shortly before the European markets close, the US starts to rally.

This pattern confirms a two-way pull on markets, with corporate earnings and the US economy pulling markets upwards but the eurozone pulling them down. This pattern continues a trend that has been underway for much longer. As pointed out by Ed Yardeni last month, since the markets turned around on 9 March 2009, the S&P index had gained 101.6% while the MSCI Europe had gained only 44.5%. What are the drivers behind US equity performance? Looking to the US, the reasons for strong US equity performance are the strength of US corporate earnings, as illustrated by the first quarter’s res...