In this 36th episode of the OppenheimerFunds World Financial Podcast, equity strategist Talley Léger talks about equity performance patterns in 2018.

He explains that, in some ways, these patterns are looking similar to those of 2017: Emerging market (EM) and European stocks are outperforming the global benchmark and U.S. equities, as expected. The growth style of investing in the United States is still beating its value counterpart—and the dollar is flat to down.

But Léger also points out some important differences: U.S. small-cap stocks have traded places with their large-cap brethren and are now outperforming them. Yet despite near-term optimism about the boost that tax cuts have given to corporate earnings, he expects recent U.S. small-cap outperformance to wane, given tightening monetary policy, rising short-term interest rates, a flattening yield curve, heightened volatility, higher exposure to below-average economic growth, a weaker dollar, slower earnings growth and anemic investor flows.

Finally, he points out several reasons why international equities—including EM and Europe—should continue to outperform U.S. stocks. For more, listen to Episode 36 of our World Financial Podcast on the OppenheimerFunds Equity Strategy Playbook.