Valuation – PEG Ratio between U.S. and Europe As equity returns broaden in 2025, the PEG ratio gap between the U.S. and the rest of the world is narrowing. This convergence in growth-adjusted valuations is likely to extend into 2026, even if U.S. valuations remain lofty. Image: Goldman Sachs Global Investment Research
Market Capitalization – United States vs. Asia vs. Europe Wall Street has smoked global rivals on roaring earnings, fat margins, and deep capital. But, sky-high prices and overheated expectations could break its stride. Image: Goldman Sachs Global Investment Research
Returns – Magnificent Seven vs. European Banks Since January 2022, European banks have outperformed U.S. mega-cap tech stocks—a notable achievement considering the longstanding dominance of American tech giants in global markets. Image: Goldman Sachs Global Investment Research
Valuation – 12-Month Forward STOXX Europe 600 PE European stocks look less expensive than at the beginning of this year. Image: Goldman Sachs Global Investment Research
U.S. vs. Non-U.S. Equity and U.S. vs. Europe Equity and Real Trade-Weighted US Dollar Index The start of 2025 marks a significant pause-and possible reversal-in U.S. equity exceptionalism. Whether this is a temporary pause or a fundamental shift remains to be seen, but the landscape for global investors has changed. Image: Goldman Sachs Global Investment…
Valuation – Average P/E for Stoxx Europe 600 and S&P 500 As equity markets rally and valuations climb, markets become more susceptible to negative surprises. This has led many investors and analysts to worry about stretched prices and limited margin for error. Image: Bloomberg
Quarterly Seasonality of S&P 500 Returns vs. STOXX Europe 600 U.S. equity returns tend to be strongest relative to Europe during the second quarter. Image: Goldman Sachs Global Investment Research
Over the Following Time Horizons, Would you Rather Own U.S. or European Equities? Deutsche Bank’s survey of 400 financial professionals worldwide shows a strong short-term preference for European stocks over U.S. equities, but this trend is expected to reverse in the longer term. Image: Deutsche Bank
European Defense Stock Returns vs. U.S. Defense Stock Returns The trend of European defense stocks outperforming U.S. peers is likely to persist in the medium term due to sustained increases in military spending and geopolitical realignments favoring local suppliers. Image: Gavekal, Macrobond
Europe Equity Fund Flows European equity funds have experienced a surge in inflows, reaching a two-year high and indicating a notable shift in market sentiment. Image: Deutsche Bank Asset Allocation
Europe’s GRANOLAS Stocks and Market Capitalization While Europe may not have the Magnificent Seven, it does have the GRANOLAS, which represents Glaxosmithkline, Roche, ASML, Nestle, Novartis, Novo Nordisk, L’Oreal, LVMH, Astrazeneca, SAP, and Sanofi. Image: Alpine Macro