Time for stockmarket investors to look beyond the US

US equity markets have continued to "party" as the final quarter of the year gets under way, says James Hughes, chief market analyst at AxiTrader. News that an amended Nafta trade deal had been agreed upon to bring Canada into the fold with the US and Mexico has provided much of the cheer.

The S&P 500 has recently jumped from one all-time high to the next, and is now up 9% this year. By contrast, international stocks remain in the doldrums. Neither eurozone nor Chinese stocks have returned to their pre- or post-crisis peaks. What's more, the MSCI World index (excluding the US) is down by nearly 3% in 2018, note Colby Smith and Robin Wigglesworth in the Financial Times.

The relative performance of the S&P 500 compared to the rest of the world is now at its most extreme level since at least 1970. But the gulf seems likely to close.

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For one thing, the US Federal Reserve looks set to keep hiking interest rates, which will temper growth and make corporate debt more expensive, taking "the shine off stocks", says Hughes, while the ongoing trade spat with China may also dampen confidence.

Meanwhile, a huge gulf in valuations has opened up between the US and other markets. The divergence has prompted some investors to turn their backs on Wall Street in search of bargains in Japan, emerging markets and Europe.