Wells Fargo Advisors: Retain Overweight On Europe, U.S. Still The 'Lead Dog'

With Greece reaching an agreement with its creditors and the markets celebrating the deal, should investors jump in the rally? Paul Christopher, chief global market strategist at Wells Fargo Advisors, a subsidiary of Wells Fargo & Co WFC, was on Bloomberg TV to answer that question.

Retain Overweight On Europe

Christopher was asked if investors should participate in this rally post the deal in Greece. He replied, "Yes, we believe they should, especially with a Greek deal getting done. Yes, it's a short-term deal and they're kicking the can down the road, but the emphasis should return to the favorable fundamentals -- economic growth and we think earnings growth -- in Europe going forward. We retain an Overweight to Europe."

Favoring The U.S.

On his outlook for U.S. equity markets, Christopher said, "We continue to like the U.S. and think that the U.S. is still the lead dog in terms of global economic activity, global economic growth. So, we are favoring the U.S. first, we favor the developed markets second, we put the emerging markets third and in order to fund those purchases we would recommend lightning up on fixed income, especially at the long end of the curve."

Europe Looks Rather Interesting

Christopher explained how the European stocks are set for a surge, saying, "Well, the economic cycle in Europe is just beginning. So, if you take valuations here in this country versus valuations in Europe, they're about the same. But the prospects for Europeans earnings to improve from here, we think, they probably have more forward momentum than U.S. earnings do at this point and so when you consider the differences in the cycle Europe actually looks rather interesting."

"We wouldn't encourage Europe and Japan over the U.S., but we think that the fair valuation doesn't mean that the U.S. is more or less attractive."