A Change In Equity Leadership – November 26, 2018



A Change In Equity Leadership

Changes in equity leadership at the regional and sectoral level tend to occur during corrections (or bear markets). The current risk-off phase looks to be follow this pattern, with U.S. equities showing signs of lagging global benchmarks.

Our latest equity research examined this topic in detail. U.S. equity prices have surged this cycle, outperforming their non-U.S. counterparts by 145%, a magnitude that that has been on par with the 1990s economic expansion and equity bull run. That said, U.S. relative equity price momentum, earnings and valuations are all now stretched, making a reversal inevitable. Indeed, our analysis of the forces driving U.S. equity outperformance revealed that the case for betting on a reversal in relative performance is falling into place.







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