While history is never the same, we all know it rhymes, and since the start of this US equity bear market, we’ve been struck by the similarities to the dot.com bubble whereby reflexive momentum and a price-induced supportive narrative resulted in a decade where there was no alternative to US stocks and the virtual vortex sucked in money from the rest of the world to fund a period of “US Exceptionalism”. Unfortunately, the good times couldn’t last, and cracks have emerged as central banks have removed policy accommodation. The pain isn’t unique to the US. However, the US is particularly vulnerable and Europe's own needs increase the odds that the vortex will run in reverse. As we will outline below, the result is that the decade-long outperformance of the US vs its peers appears to be breaking down.
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