The S&P 500 has gained more than 24 per cent in 2024, putting it well ahead of benchmarks in Europe, Asia and emerging markets. At 22 times expected future earnings, its premium to an MSCI index of stocks of more than 40 other countries stands at its highest in more than two decades, according to LSEG Datastream.
Though US stocks have outperformed their counterparts for more than a decade, the valuation gap has widened in 2024 thanks to resilient economic growth and strong corporate earnings - particularly for the technology sector, where excitement over developments in artificial intelligence has boosted the shares of companies such as chipmaker Nvidia.
Some market participants believe Trump's agenda of tax cuts, deregulation and even tariffs can further fuel US exceptionalism, outweighing worries over their potentially disruptive nature and inflationary potential.
"Given the pro-growth tendencies of this new administration, I think it's tough to fight the battle against US equities, at least in 2025," said Mr Venu Krishna, head of US equity strategy at Barclays.
Signs of a growing US bias were evident immediately after the Nov 5 election, when US equity funds received more than US$80 billion (S$107.66 billion) in the week following the vote while European and emerging market funds saw outflows, according to Deutsche Bank.
Denne historien er fra November 23, 2024-utgaven av The Straits Times.
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Denne historien er fra November 23, 2024-utgaven av The Straits Times.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
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