Welcome to Thoughts on the Market.
I'm Paul Walsh, Morgan Stanley's head of European research product and I'm joined by my colleagues Mike Wilson,
Morgan Stanley's CIO and chief US equity strategist and Marina Zavolok, our chief European equity strategist.
Investors are asking if Europe can sustain its recent stock market outperformance against the US or
if we're poised for a tactical reversal and today's episode is going to be a special kind of face-off looking at the relative merits of our US equity strategy views against our European stock market views as well.
It's Wednesday, April the 2nd at 9 30 a.m. in London.
Our clients love the face-off work that we do and I think today we've really got the ultimate face-off looking at the relative merits of our US equity strategy views and our European stock market views as well.
So when I think about year-to-date, Mike, I'm going to start with you.
Europe's obviously done pretty well.
I mean,
we've seen clearly defence and banks being the main thrust of that performance relative to the US and when we look at US equities and I think this has been very consistent honestly with the views that you've been expressing
since the start of the year.
There's been weakness there driven by a range of factors that I think everybody listening in will understand and are well documented.
But the key from my side is I sense you think there may be a tactical opportunity here and
that we could be on the cusp of seeing something of a rotation back into US equity.
So I wanted to hear your views, how they're evolving and if you think there's a real tactical opportunity here.
I've not really been surprised at how the US equity market has traded this year given our view and the sequencing of policy.
I think the surprise for me anyways is just how much Europe has gone up and I think a lot of that just has to do with flows and flows of capital.
So I mean to me the question for whether this is going to be kind of a structural change is like what's really driving the outperformance in the near term.
Is this something that is temporary or is it something that's more secular and structural and I think it's probably both and the reality is