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USA vs EAFE relative performance

Over the last 15 years, the US stock market has outperformed #europe and #fareast markets, excluding #China and #Japan. Loose monetary policy tailwinds have pushed equities in the US to almost threefold appreciation vs MSCI #EAFE. But as you can see in the chart below, there are cycles of outperformance, of around 6-7 years on average. And the current one has doubled the prior ones in length. Markets that are relatively cheap become attractive vs the reigning one that becomes expensive, and a new cycle starts. Difficult to predict what the catalyst for the next rotation will be: is it the #fed hawkishness, the #usdollar, or simply gravity.

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Source:JP Morgan AM.

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