BlackRock’s Boivin predicts U.S. stocks are set to outperform European equities

BlackRock’s Jean Boivin predicted that U.S. equities will outperform European stocks as the future of European stocks was limited to sectors like defense and banks. He pointed out that there was no strong conviction yet to ‘play Europe over the US over the next six-to-12 months’. 

Boivin predicted that the U.S. would see the strongest earnings growth within the coming six-to-12 months. The strategist said a 10% tariff was likely the best possible landing zone, and the US can adjust to that. However, he cautioned that the tariffs would be a ‘different story’ if they exceeded 10%.

Charlie Bilello, the chief market strategist at Creative Planning, also said that U.S. stocks had been outperforming international stocks by a big margin for 16 years running. According to Bilello, the U.S. was now more than three standard deviations above the mean in terms of historical outperformance.

Boivin favors U.S. stocks over European equities

US equities will soon regain their long-held edge over European peers, according to Jean Boivin, head of the BlackRock Investment Institute https://t.co/ulgY1BnrSr

— Bloomberg Markets (@markets) March 27, 2025

Boivin said US equities will soon regain their long-held edge over European stocks, as the future of European stocks was limited to sectors such as defense and banks. He added that he expected U.S. earnings downgrades to be short-lived as tariff-related uncertainty came to an end. However, UBS’s chief strategist Bhanu Baweja said this week he expected the S&P 500 to drop another 8% as a consumer slowdown continued to squeeze corporate earnings.

Keith Lerner, the Co-Chief Investment Officer and Chief Market Strategist at Truist Advisory Services, also said the US outperformed Europe by 20% since December, but markets did not move in straight lines. He pointed out that Europe’s defense-driven rally may pause, while US fiscal stimulus offered short-term opportunities.

“The US is the place where we expect to see the strongest earnings growth on a six-to-12 month horizon.”

–Jean Boivin 

As per Reuters reports on March 27th, the Dow Jones Industrial Average (.DJI) rose 20.71 points or 0.05% to 42,478.39, the S&P 500 (.SPX) climbed 6.42 points or 0.12% to 5,718.66, and the Nasdaq Composite (.IXIC) advanced 21.25 points or 0.09% to 17,920.27.

Meanwhile, European stocks fell, with weakness in shares of Europe’s top carmakers such as Volkswagen (VOWG.DE) down nearly 2%, BMW (BMWG.DE) losing almost 3%, and Mercedes-Benz (MBGn.DE) sliding more than 4%.

U.S. economy has grown faster than expected since the end of 2024

A Commerce Department report on March 27th revealed that the U.S. economy grew a little faster than expected in the final three months of 2024. The Bureau of Economic Analysis (BEA) also said in its last of three estimates that the U.S. GDP accelerated at a 2.4% pace for the October-through-December period. That was 0.2 percentage points ahead of the previous estimate and came from an upward revision to consumer spending, which grew at a 4% rate in the fourth quarter.

In addition to the upward change in GDP, the BEA noted that core inflation was a bit softer than previously indicated. The personal consumption expenditures price index (excluding food and energy prices), which the Federal Reserve uses as its primary inflation gauge, increased by 2.6%, down 0.1 percentage points from the prior estimate.

CNBC also reported that the major indexes were clinging to marginal gains as stocks flitted between gains and losses this week. The S&P 500 ticked up nearly 0.8%, while the Nasdaq gained 0.5%. The 30-stock Dow has also added 1% this week thus far. Within the S&P 500 sectors, communication services, consumer discretionary, and financials saw the largest gains, whereas utilities, health care, and real estate were the main decliners. However, sales of new single-family homes in the U.S. rose in February, recovering from a drop in January.

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