Why Morgan Stanley says U.S. outperformance will continue, even if normalcy returns

U.S. stocks have outperformed international peers since the Iran conflict began, driven by the U.S. being a net oil exporter while major European and Asian economies are net importers. Expect relative strength in U.S. equity performance tied to energy exposure and potential weaknesses for import-dependent markets as oil-driven flows and sentiment favor U.S. assets.

Analysis

U.S. stocks have outperformed international peers since the Iran conflict began, driven by the U.S. being a net oil exporter while major European and Asian economies are net importers. Expect relative strength in U.S. equity performance tied to energy exposure and potential weaknesses for import-dependent markets as oil-driven flows and sentiment favor U.S. assets.