U.S. shutdown a cornucopia for Eurozone stocks

Eurozone stocks have outperformed U.S. stocks since the U.S. government shutdown began October 1, according to Russell Indexes.

Read: G-20 leaders to push for a U.S. shutdown solution

Also, value stocks have outperformed in non-U.S. markets year-to-date as of October 7, while growth stocks led in the U.S. as reflected by the Russell 3000 Index.

For the month of October as of October 8, the Russell Eurozone Index has returned 0.2% relative to a (-2.0%) loss for the Russell 3000 Index for the same time period.

This builds on a 2013 third quarter return of 11.3% for the Russell Eurozone Index, outpacing the U.S. Russell 3000 Index which had a 2.1% return for the same time period. The two indexes are now equal for year-to-date performance as of October 8.

Read: Eurozone economy stabilizing

For 2013 year-to-date as of October 8, value stocks (17.6%) have outperformed their growth counterparts (13.5%) within the Russell Eurozone Index. The opposite holds true for U.S. stocks, as reflected by the outperformance for the Russell 3000 Growth Index (15.8%) versus the Russell 3000 Value Index (15.5%) for the same time period.

“Eurozone stocks continued to pull ahead in October relative to U.S. stocks, driven to a large extent by the retreat of Berlusconi in Italy and the current dysfunction of the U.S. government with a looming debt ceiling deadline on the horizon,” said Wouter Sturkenboom, investment strategist with Russell Investments Europe.

“We continue to see improving economic fundamentals in Europe combined with relatively low market valuations. Given these factors, it is no surprise that value stocks have outperformed in Europe amid an increasingly favorable climate for European equities.”

Read: More evidence of European recovery

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.