Duncan Lamont, head of Schroders' investment strategy research, expects the US stock market to continue to lead the world in 2024, as it has for six of the past seven years. The consensus is that the long-term advantage of US stocks is over and that now is the time to reduce exposure, particularly to large-cap stocks. However, this does not take into account the counterargument.Equity valuations in the US are close to the most expensive levels in the past 143 years, except during the dotcom bubble. While this is not a new argument, this year's rebound has pushed valuations to uncomfortable levels. In contrast, valuations in other regions are quite reasonable. Relative to history, valuations outside the US are close to fair value. Therefore, other stock markets are still trading at historic lows relative to the US.In fact, the US is not the only market expected to perform well. About half of European and Japanese companies are expected to achieve double-digit earnings growth over the next 12 months, slightly higher than the US, and 44 per cent of UK companies are expected to perform similarly.Productivity levels are a key driver of economic growth. In the years following the global financial crisis, US productivity growth outpaced other countries, and during the pandemic, it not only did not fall but accelerated. This gap is expected to continue. If these predictions are true, the US’s economic specialism will continue. Moreover, the US’s working-age population is expected to grow, while other countries’ will decline, supporting long-term US economic growth, but this depends on the future development of immigration policy.The US also performs better in the economic cycle, delivering more positive economic surprises than other regions. Schroders’ economics team recently raised its growth expectations for the US in 2025 and 2026 in response to President-elect Trump’s plans. Now, growth is expected to be 2.5 per cent next year, up from 2.1 per cent. In contrast, growth forecasts for the eurozone and the UK are 1.2 per cent and 1.6 per cent respectively.However, strong growth comes at a cost: higher inflation expectations. While the base case is for strong US economic performance, in a downside scenario, higher inflation and interest rates could push the US towards stagflation.About 60 per cent of revenue for large-cap US stocks comes from the US, compared with less than half for other markets. If the US economy does indeed boom, US companies will be the main beneficiaries. However, it is worth noting that small-cap and value stocks in the US are more dependent on domestic growth than large-cap stocks, and if this is the main reason to support US stocks, it may provide a better way to invest in them. Moreover, corporate buybacks and mergers and acquisitions provide a continuing source of demand for US stocks.