January 05, 2022

The DAX Versus The S&P 500

The S&P 500 outperformed European equities in 2021, but an excessively hawkish Fed could spoil the party. Historically, a flattening yield curve has often warned of equity market tops. The U.S. Treasury curve has flattened significantly in contrast to the German Bund curve.

Eurozone liquidity conditions remain very accommodative given the ECB’s continued dovish stance. Liquidity is one of several reasons why the GTAAI model prefers German equities over the S&P 500.


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