Stocks globally continue to bounce, even as new COVID-19 cases spike. Optimism over economies reopening is driving the recovery, while many economic data points are coming in much better than expected. As things slowly turn back around, is it finally time for Europe to outperform the US? The LPL strategists discuss this and more in this week’s podcast.
Time for Europe?
The LPL strategists discuss why they continue to like the United States over developed international, specifically Europe for the rest of this year. The economy is weaker, international is more value oriented (see chart below), and longer-term structural concerns remain. Valuations are cheaper in Europe, but those aren’t a great timing tool. One area of potential outperformance is Japan, which could see a better economy than the United States and Europe this year.
Strong Economic Bounce
Many of the recent US economic data points have come in much better than expected. From jobs created in May, to a historically strong retail sales number last month, the economy is soaring back as the economy opens back up. The LPL strategists discuss why this is a great sign, but still anticipate things will tail off some over the coming months. Remember, much of the economic data was as low as it could be, so we are coming off historically low levels.
New cases are soaring in many states, but the overall trend of deaths continues to fortunately move lower. As the LPL strategists discuss, there are many more ways to fight this horrible disease we didn’t have this time three months ago; also, many younger people are getting tested. We still anticipate a vaccine over the coming six to 12 months, but we are also finding many existing drugs have positive results in this fight.
Tune in now
Listen to the entire podcast to get the LPL strategists’ views and insights on current market trends in the US and global economies. To listen to previous podcasts go to Market Signals podcast. You can subscribe to Market Signals on iTunes, Google Play, or Spotify.
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The Standard & Poor’s 500 Index is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.
The source for the unemployment numbers discussed in this podcast is the US Department of Labor.
All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.
This Research material was prepared by LPL Financial, LLC.
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