European Equities used to be at least as good as US Equities.
But something(s) changed in 2009.
One issue was that Europe had to deal with the hangover from the credit boom, with rolling sovereign debt crises and structurally lower growth as it digested years of malinvestment and deleveraging.
The USA on the other hand saw a decade+ of super-easy monetary policy + struck “tech stock oil” (and actual oil with the shale boom, and now “AI oil”).
While it’s hard to see the USA coming unstuck or Europe striking its own oil, the thing to keep in mind is that the narrative and story usually only becomes obvious after price has moved…
Line chart divided into two periods: 1990-2009 on left showing Euro Stoxx in blue and S&P 500 in black both indexed to 100 rising and falling similarly from 1990 to 2009; 2009-present on right with S&P 500 in black rising sharply to 800 while Euro Stoxx in blue rises modestly to 300. Title reads US and European Equities used to travel a very similar path in local currency.
You might have missed it, but US stocks have actually peaked already vs global stocks.
This is not necessarily a bad thing (e.g. if we end up seeing bullish rotation), but it is a thing and worth taking note of
Line chart titled US Equity Leadership Cycles & Peaks displays relative performance over time from 1957 to 2025. Blue line represents USA vs Developed Markets with upward trends and peaks. Black line shows USA vs Emerging Markets with fluctuations and recent downturns.
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