US Equities Overweight and Relative Cheapness

• Goldman Sachs has been overweight US equities since 2009, initially by 23%, now by 7%.
• While other developed markets appear cheaper compared to the US, this difference is partly due to sector composition.
• The US market has a larger share of high-growth tech stocks, while other markets like the UK have less tech and more energy stocks, which trade at lower valuations.
• After adjusting for this difference in sector weights, other markets appear less cheap than they initially seem.
• Another factor contributing to US market attractiveness is its diverse economy and lower exposure to China's slowdown, which might affect other markets negatively.