Markets rise, investors especially bullish on US

Markets rose on Monday.

In the US, the S&P 500 rose 0.5 percent and the Nasdaq Composite rose 0.7 percent to a record high.

Elsewhere, the STOXX Europe 600 rose 0.3 percent and the Nikkei 225 jumped 1.4 percent.

“Despite threats and recriminations from China and other global leaders, investors are actively choosing to ignore the trade tariff tensions, with global equity markets rising,” said Rebecca O’Keeffe, head of investment at Interactive Investors.

Investors appear particularly bullish on US stocks. According to estimates compiled by FactSet, analysts are predicting earnings growth of 18.9 percent in the second quarter and a continuation of double-digit growth for the rest of the year.

“Investors are looking at the broader data from the US and saying, 'We're still doing okay,' -- especially compared to the rest of the world,” said Paul Nolte, portfolio manager with Kingsview Asset Management.

In the meantime, though, Europe is appearing less attractive after the political turmoil last week.

In a report on Monday, Europe-based global equity strategist Mislav Matejka and his team said that “global investor flows are likely to stay on the sidelines as Italy will remain an issue in the background, with the new populist government being potentially quite confrontational”.

The team reduced their rating on euro zone stocks to neutral from overweight while raising their US allocation to overweight from neutral.