What do you need to know
- From the beginning of the year to Tuesday, the MSCI Euro Index is up 17.5%, up from 13.6% for the S&P 500.
- The gap since November, when news of the COVID-19 vaccine emerged, is even wider: 47% versus 30%.
- The EU is also expected to lead the United States in terms of economic growth and corporate income growth throughout 2021.
According to Jeff Kleintop, chief global investment strategist at Charles Schwab & Co., stock market leadership has shifted from the US to Europe.
From the beginning of the year to Tuesday, the MSCI euro index rose 17.5% on the basis of total US dollar returns, up from 13.6% for the S&P 500, Kleintop said at a recent Schwab Market Outlook webinar.
The gap is even wider since November, when news broke that a COVID-19 vaccine would be available soon, ready for distribution: a 47% gain for the MSCI Euro Index versus 30% for the S&P 500, although Europe lags behind the US. on the distribution of vaccines against coronavirus, but is catching up.
Europe is also catching up with economic growth as restrictive locks end, the European Central Bank ramps up bond purchases and the European Commission begins rolling out its largest stimulus plan, equivalent to $ 910 billion.
“The peak of economic growth in the eurozone may not come earlier than this year,” Kleintop said, adding that growth in the US is now at its peak and in China at the end of last year.