(London)

US market valuations are eye-watering. By several measures the S&P 500 is as richly valued as it has ever been. With that in mind, overseas stocks, especially in Europe, appear to be a good bet. For example, while US stocks are now well ahead of their pre-COVID peaks, the Stoxx Europe 600 is still down 9.2% since its high in February. Since March, the S&P 500 has rebounded by 60% while the Stoxx Europe 600 has only seen a 40% rise.

FINSUM: So European benchmarks are more exposed to the banks and industrials, which were more hurt by COVID than US tech companies, which dominate American benchmarks. That said, now that a vaccine is in site, there is a big chance for appreciation in Europe that seems much less likely to occur in the US.