Uddrag fra Marketear:
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Buy-the-dip in US exceptionalism
From contrarian to consensus back to contrarian in warp speed – it seems like being long Europe is now again somewhat of a contrarian trade. Several Wall Street banks have in the past days said that the outperformance has gone too far and that it is time to get back into the US supremacy trade again. Here is a summary of what Morgan Stanley is saying.
MEGA vs. MAGA
As the US exceptionalism narrative has faded over the past few months, European stocks have gained momentum. Global investors have increasingly allocated capital to Europe across assets. However, Morgan Stanley equity strategists think that the European outperformance has run its course, for now.
Source: Morgan Stanley
Follow the flow
Money is flowing into Europe….
Source: Morgan Stanley
Folge dem Geld
Fund flows into Europe particularly driven by Germany.
Source: EPFR
The earnings connection
Part of the story is that the relative earnings revision breadth has favored Europe YTD.
Source: FactSet
Tail-wind becomes a head-wind…
That earnings tail-wind could reverse in 1Q earnings season with weaker USD/EUR.
Source: Morgan Stanley
Oh no – not good
Earnings expectations in Europe (consensus) may have already peaked and appear to be declining.
Source: Morgan Stanley
Very overbought
From a tactical perspective…
Source: Morgan Stanley
Sigma boy
From very oversold to somewhat overbought.
