Spot the opportunities: U.S. vs European stocks
Are valuations too high? Or just right?
European and U.S. equity markets have already seen meaningful levels of volatility in 2025, and investors are not yet through the first quarter of the year. Is there more to come as uncertainty cements itself as a stubborn feature of the economic landscape? The insights listed below aim to help allocators spot the right opportunities in these two markets among this question.
On European equities
Europe’s Enduring Investment Themes (Brookfield)
This paper discusses the future of European equities given today's macro environment.
Germany’s Surprising Equity Market: Look Past the Macro Gloom (Capital Group)
For compliance reasons, this paper is only accessible in certain geographies
Barring a destabilizing increase in U.S. tariffs, Germany's DAX is expected to benefit from a rotation into value stocks in 2025.
A Positive Start to the Year (Candriam)
Fundamentals remain well oriented for European equities. However, there are signs that things may change.
Decomposing Equity Returns: Earnings versus Multiple Expansion (Robeco)
This paper decomposes returns for U.S. and European equities, as well as for other stock markets.
Why We’re Banking on Europe’s Value Revival (M&G Investments)
For compliance reasons, this paper is only accessible in certain geographies
Over the last three years, value has outperformed growth by a wide margin. Far from being dead, M&G Investments believes that European value is alive and well.
Europe's Balancing Act: Opportunities and Challenges (PGIM Quantative Solutions)
Ultimately, Europe faces a challenging but pivotal moment in navigating structural headwinds and shifting global dynamics.
On U.S. equities
Where to Look When Equities Are Priced for Exceptionalism (PIMCO)
The cyclically adjusted price-to-earnings ratio has climbed to levels previously seen only twice in the past three decades.
The U.S. Stock Market as a Quasi-Ponzi Scheme (Price Action Lab)
Contrary to claims, mostly on financial social media, the U.S. stock market is not a Ponzi scheme, as the majority of large-cap companies are highly profitable, says this paper.
U.S. Equities Market Attributes January 2025 (S&P Dow Jones Indices)
The S&P 500 index posted a broad 2.70% gain for January, after a 2.50% decline in December and November’s 5.73% gain.
Global Equity Outlook 2025: Has U.S. Exceptionalism Peaked? (William Blair)
Given the strong performance of U.S. equity markets in recent years, the U.S. now encompasses nearly two-thirds of the MSCI All Country World Index.
