Welcome to Thoughts on the Market. I'm Paul Walsh, Morgan Stanley's head of European research product,

and I'm joined by my colleagues Mike Wilson, Morgan Stanley's CIO and Chief US Equity Strategist,

and Marina Zavallok, our chief European equity strategist. Investors are asking if Europe can sustain its recent stock market outperformance against the US

or if we're poised for a tactical reversal.

And today's episode is going to be a special kind of face-off,

looking at the relative merits of our US equity strategy views against our European stock market views as well.

It's Wednesday, April 2nd at 9.30 a.m. in London.

Our clients love the face-off work that we do, and I think today we've really got the ultimate

face-off looking at the relative merits of our US equity strategy views and our European stock market views as well. So when I think

about year-to-date, Mike, so I'm going to start with you. Europe's obviously done pretty well. I mean,

we've seen clearly defense and banks being the main thrust of that performance relative to the US.

And when we look at US equities, and I think this has been very consistent, honestly, with the views that you've been expressing since the start of the year.

There's been weakness there, driven by a range of factors that I think everybody listening in will understand and are well documented.

But the key from my side is, I sense you think there may be a tactical opportunity here and that we could be on the cusp of seeing something of a rotation back into

U.S. equity. So I wanted to hear your views, how they're evolving, and if you think there's a

real tactical opportunity here. I've not really been surprised in how the U.S. equity market has

traded this year, given our view in the sequencing of policy. I think the surprise for me anyways

is just how much Europe has gone up.

And I think a lot of that just has to do with flows and flows of capital.

So, I mean, to me, the question for whether this is going to be, you know, kind of a structural

change is like what's really driving the outperformance in the near term? Is this something that is,

you know, temporary or is it something that's more secular and structural? And I think it's probably something that is, you know, temporary or is it something that's more

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