| Europe’s stagflation crisis and a property downturn in China are flashing a familiar message: for equity investors, there is no real alternative to the US sharemarket.P 500 boast about an eight percentage-point lead over the Stoxx Europe 600. The index is on course for its eighth year of outperformance in the past decade, as the artificial intelligence buzz overshadows economic recession fears and pricey valuations.
Investors have fled European equity funds for 25 weeks straight, Bank of America says, citing EPFR Global data, while Germany’s DAX, home to the region’s manufacturing stalwarts, has just posted its worst monthly performance since December. Tech should benefit even more next year as Treasury yields slide, reckons Nicolas Domont, a fund manager at Optigestion in Paris, and his quest for mega-cap stocks has yielded little outside of Wall Street.