Comparing US and EU Stock Markets

Stock Markets

In the last couple of years, stock markets on both sides of the Atlantic Ocean have been developing distinctively. Multiple factors have greatly impacted the markets, including the coronavirus pandemic, inflation, and the war in Ukraine. Meanwhile, societies worldwide are re-opening, and travel between Europe and the United States of America is again possible with a visa or ESTA. How are their stock exchanges developing, and what are the prospects?

Stock markets and Covid-19

Ever since the outbreak of the coronavirus pandemic, the world’s stock exchanges have been fluctuating immensely. At the start of the pandemic, when the fear of the virus spread rapidly, stock markets began to crumble. It led to the shutdown of shops and home offices and the collapse of international trade chains. Overseas trade halted as importing and exporting goods became challenging due to closed borders. Traveling internationally was only permitted in exceptional cases, and our fast way of life came to a pause. 

Shortly after the initial shock of the Covid-19 outbreak, the markets were remarkably quickly filled with optimism. The economy recovered slowly but surely, as society adapted to the new circumstances, and stock markets reached new records. Meanwhile, entry requirements for travelers have been relaxed throughout. Traveling to the USA is possible again for fully vaccinated travelers with a valid ESTA. This electronic travel permit allows tourists and business travelers to enter the US without needing an actual visa.  

Uncertainty returns

These positive developments did not last long, with inflation and the war in Ukraine causing more unpredictability and uncertainty. Globally, all markets are affected. Investors are again avoiding risks, leading to increased sales of shares and ETFs. Currently, the economic prospects for the upcoming months aren’t great, so that these uncertainties may last longer. 

USA and Europe in comparison

For people who have followed the stock markets in recent years and decades, it should not be a surprise that the US markets have grown much more than the European markets. There are various reasons for this. On the one hand, it is a question of mentality because, in the US, shares have always been seen as a tool for everyone to save money. Europeans are more cautious in this respect. While in the US, about 50% of the population says they own shares, only about 33% in the UK. For the UK, this is a 50% increase since 2018. On the other hand, US-listed companies are generally much more profitable than those listed on European stock exchanges. Technology stocks, in particular, have experienced significantly higher growth rates in the US than in Europe.

Reversal of the trends

Rumour has it that the financial world is awaiting a reversal of the market proportions between the US and Europe. For example, the growth of large technology stocks in the US seems to have been interrupted, and equities are becoming more popular as an investment tool in Europe. For the time being, however, the situation remains uncertain, and it is difficult to predict how the markets will develop in the future. What is certain, however, is that coronavirus measures are slowly being eased around the world, leaving more room for the flow of individuals and the economy.

Travel to the USA possible again

Now that the coronavirus measures are being relaxed everywhere, travel is again possible. Proof of vaccination is still required for the USA, as is a visa or ESTA. Recently, the costs of the ESTA have increased slightly, but it is still much cheaper and easier to apply for than a conventional visa. Anyone who wants to travel to America can easily apply for an ESTA online. Visiting the United States of America is a great opportunity to discover the world of stocks. With an ESTA, visitors can stay in the US for up to 90 consecutive days and are allowed to enter the country multiple times with the same ESTA within its validity period of two years. Before investing, it is always wise to consult an expert if you do not yet have a lot of experience in the stock market. 

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