U.S. Traders in European Stocks See Best Returns Since 2009
European stocks that were bought with U.S. dollars saw their best performance since 2009 as a strengthening euro boosted U.S. traders' returns on the continent, according to data from Bloomberg.
U.S.-bought European stocks posted returns of 17% this year through Sept. 1, easily topping the S&P 500's increase during the same period. The gains came as global geopolitical instability has turned the euro into somewhat of a safe-haven asset.
Although European stocks are performing remarkably well for U.S. traders, European investors haven't seen such strong gains on their own turf. The Stoxx Europe 600 Index has climbed only 4.1% in euro terms since the start of the year.
Part of the more modest returns in Europe could indicate growth in the region is at risk of falling short of expectations, HSBC strategists said in a note on Monday, Sept. 4. The strong currency and moderating economic momentum paired with current valuations and market sentiment suggest "little room for error" in the region, HSBC said.
HSBC said risks associated with a pullback in global equities are centralized in the U.S., but the rest of the world could "ultimately suffer more."
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