S&P 500 hits record high but Europe may be “outperformer going forward”

Markets rose on Monday.

The S&P 500 rose 0.6 percent to hit a record high. Elsewhere, the STOXX Europe 600 and Nikkei 225 both rose 0.3 percent.

“Binary earning surprises continue to favor the bulls so far this season,” said Jeff deGraaf, chairman of Renaissance Macro Research.

However, the Chicago Fed National Activity Index fell to -0.45 in September from 0.15 In August.

While US stocks are hitting record highs, European stocks have lagged behind their US peers for the past two years but Mislav Matejka, head of global and European equity strategy at JP Morgan, wrote in a note on Monday that this trend will reverse in the coming months.

Matekja said that he cut his overweight rating on US equities to neutral and he now believes “that international stocks will be an outperformer going forward” as “the long downtrend in Eurozone PMIs should be coming to an end”.