Are We in the Early Stages of a Major Stock Market Rotation?

That said, the expert from Capital Group recalls that the argument of low valuations has been brought up in recent years without any impact on the market, as those valuations have often been justified by the anemic earnings growth compared to the U.S. For González, what is different this time is the presence of new catalysts that “are changing the narrative for the first time in years”: fiscal stimuli in Germany, corporate reforms in Japan and South Korea, weakness of the U.S. dollar, signs of stabilization in China, and an improved political environment in Europe. “Additionally, in an environment of increased infrastructure spending, non-U.S. markets display greater diversity and have a higher weighting in heavy industry, energy, materials, and chemicals compared to the S&P 500,” he concludes.