Uddrag fra Blackrock:
We still think U.S. equities can outperform in 2025, led by tech, even as Europe’s start the year strong. Yet we broaden our risk-on view, upgrading Europe stocks.
U.S. stocks tumbled last week – now up about 3% for the year, versus nearly 9% in Europe. We see markets reflecting tariff concerns and an evolving AI story.
This week, we get U.S. PCE for January. Any pickup in inflation would provide more evidence that December’s CPI moderation was an outlier, in our view. European equity gains have outpaced the U.S. to start 2025. We had said Europe’s stocks needed a catalyst to turn around poor sentiment. We now see several that – if they materialize – could boost cheap valuations, so we close our underweight on Europe’s stocks.
Yet we still expect the U.S. to reclaim leadership this year and stay overweight U.S. stocks as corporate earnings strength and the artificial intelligence (AI) theme broaden out. We turn more underweight long-term U.S. Treasuries.
U.S. equities have long outperformed their global peers. Some pin that on tech’s greater share in its market, bigger fiscal spend in recent years and energy independence, but we would attribute it more to deeper capital markets and relative deregulation that promote risk-taking. We think the U.S. can keep its edge, even if the S&P 500 has lagged so far this year.
Yet we believe Europe can close some of the return gap. With a lot of bad news priced into European equities, even prospects of good news could help them push higher. One example: Possible de-escalation in the Ukraine war. Reduced reliance on Russian gas brought European energy prices down from 2022’s highs.
A form of peace agreement could lower energy prices further, boosting European growth and lowering inflation. This is just one of several catalysts we think could broaden U.S. equity strength to Europe.
