While I agree that long term valuation is quite distorted, which can mean either DAX is too low or SPX price is way too high, short tem I still do not see any technical justification to go long Germany against shorting US Equities.
I got one of the strongest fundamental reason from my smart Chief Economist: in Europe we do not have share buybacks, in US it is still substantial.
However, I don't know either how to evaluate and comment Norway's wealth fund decision about adding more US Stocks to their portfolio vs cutting weight in European Equities. I'd say while they certainly have some kind of reason, their timing and long term expected return seems to be very bad, in case they execute this trade at at these lows of the relative value spread between the two markets.
I got one of the strongest fundamental reason from my smart Chief Economist: in Europe we do not have share buybacks, in US it is still substantial.
However, I don't know either how to evaluate and comment Norway's wealth fund decision about adding more US Stocks to their portfolio vs cutting weight in European Equities. I'd say while they certainly have some kind of reason, their timing and long term expected return seems to be very bad, in case they execute this trade at at these lows of the relative value spread between the two markets.