Top European and U.S. Stocks: Who Will Lead Who?
While the two economies may take different paths, I wanted to see how the markets in Europe and the US are reacting to the various stimulus programs being implemented. I used the Dow Jones Index as the sample index for the US market and the DJ Euro Stoxx 50 Index for Europe. The DJ Stoxx 50 was not used since it includes the UK and I wanted to exclude the UK as it is facing similar problems to those of the US. Like the Dow Jones index, the DJ Euro Stoxx 50 Index is comprised of fifty of the largest companies in continental Europe.
The fact of the matter is that Europe's largest stocks ran much higher than the US's. And after March lows, the European stocks have rebounded and are leading US stocks again. On a 6-months basis, the DJ Euro Stoxx Index is slightly ahead of the Dow Jones Industrial Average as well. Overall these two indices closely track each other.
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