From Benchmark To Question Mark: Are U.S. Markets Losing Their Appeal With Investors?

Justin Flowerday of TD Asset Management suggests that the multi-year outperformance of U.S. markets may be coming to an end as other regions, particularly Europe, seek to boost productivity and play catch-up after a period of underperformance. Flowerday's comments come as TD Wealth, part of TD Bank Group with CDN $1 trillion in assets, serves a wide range of clients through various investment and wealth management services.

Analysis

Justin Flowerday, Managing Director and Head of Public Equities with TD Asset Management, suggests a potential shift away from the sustained outperformance of U.S. markets, citing Europe's ongoing "period of resurgence" and its efforts to "play catch up" following extended underperformance. This potential rebalancing is framed within a global context where economies and companies are universally seeking to "boost productivity." The perspective, offered by an analyst from TD Asset Management—a division of TD Bank Group which reported CDN $1 trillion in assets as of April 30, 2015—is met with a "mixed" market sentiment and an "uncertain" tone, reflected by a sentiment score of -0.1 and a market impact score of 0.3, indicating cautious investor reception to this outlook.

Key Decisions for Investors

• Investors should review their global asset allocation strategies, considering the potential for a shift in market leadership from the U.S. to regions like Europe, which is reportedly in a 'period of resurgence'.
• Given the 'uncertain' tone and 'mixed' sentiment surrounding this outlook, it is prudent to closely monitor macroeconomic indicators, especially productivity figures and relative economic growth, in both the U.S. and Europe before making significant portfolio adjustments.
• Consider identifying companies or sectors globally that are strategically positioned to benefit from the emphasized trend of productivity enhancement, as this is highlighted as a key question for economies worldwide.