European Equities Show Signs of Overheating

The video discusses the European market's current trends, highlighting a steep discount compared to the US. The Bank of America survey shows increased interest in the region since 2018. The Stock 600 has seen significant gains, outperforming other indices. However, there are concerns about market overheating, indicated by the relative strength index. Despite this, many investors remain optimistic. The Vanguard Europe fund has seen substantial inflows, but potential risks include global growth softening and Fed policy changes.

What has contributed to the recent nine-day winning streak of the stock 600?

• A drop in oil prices

• A decline in US equities

• Value and cyclical tilt in European equities

• Increased interest rates

How has the stock 600 performed compared to the S&P 500 and the MCI Emerging Markets Index?

• It has underperformed both

• It has outpaced both

• It has only outpaced the S&P 500

• It has matched the performance of both

What does a relative strength index above 70 indicate?

• The market is in oversold territory

• The market is stable

• The market is in overbought territory

• The market is undervalued

What are some potential risks mentioned for the European market?

• Strengthening US dollar

• Softening global growth expectations

• Rising oil prices

• Increasing unemployment rates

What could influence the future performance of the Vanguard Europe fund?

• Changes in US tax policies

• New trade agreements

• Federal Reserve's actions on inflation and tapering

• Technological advancements