European equities won’t provide safety if US bubble bursts
My latest commentary piece for Reuters has gone online. In this one, I argue that investors in Europe should be afraid of a crash in the expensive US market. A major correction in the US will likely hurt European markets significantly. Read why it could even be worse than after the tech bubble crash in 2000:
European equities won’t provide safety if US bubble bursts: Klement
Dec 12 - High U.S. equity valuations have been ringing alarm bells in recent weeks, signalling that the market may be ripe for a correction. Investors may respond by moving into cheaper European markets, but investors likely won’t find much safety across the pond because a significant downturn in the U.S. would likely drag Europe down with it.
You betcha. US and European equities are highly correlated. Recent underperformance of European equities does not indicate overperformance in upcoming bad times.
Agreed, although business cycle differs from politics in the given country. While UK is still shunned at times, we must show France, Germany et al that we share much heritage, and hope isolationism does not increase: be good friends & allies.