What would it take for European stocks to outperform the US?

The headwinds and tailwinds to look out for in 2020

clock • 4 min read

The outperformance of US stocks relative to European counterparts has been one of the defining characteristics of equity markets in the post-crisis period.

Despite an improved run for European stockmarkets so far this year, the US market has outperformed Europe by more than 120% since 2010. Stark differences in sector weights have resulted in two sectors alone - US tech and European financials - accounting for close to half of this gap. From 2017 to date, when US tech stocks have soared and European financials have sagged, these two sectors alone have driven over three-quarters of the US market's overall outperformance. Catalysts for a European revival? US tech has been on a seemingly unstoppable march higher since the start of 2013...

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