US vs Europe: The buying opportunity of a generation?

Max King, portfolio manager in Investec Asset Management's multi-asset team, asks whether the disparity between US and European equity market performance is justified, suggesting now could be the perfect entry point into stocks.

Technical analysts have noticed a strange pattern in recent weeks: European markets are dismal, pulling down the US market as it opens. Shortly before the European markets close, the US starts to rally. This pattern confirms a two-way pull on markets with corporate earnings and the US economy pulling markets upwards but the eurozone pulling them down. This pattern continues a trend that has been underway for much longer. As pointed out by Ed Yardeni last month, since the markets turned around on 9 March 2009, the S&P index had gained 101.6% while the MSCI Europe had gained only 44.5%. ...