Uncertain outlook: the euro sculpture in front of the headquarters of the European Central Bank (ECB) in Frankfurt. The eurozone is entering a quasi-recession, writes BNP Paribas strategist Luigi Speranza.— Reuters
FRANKFURT: Over the past few weeks, European stocks have staged an unusually strong comeback versus their US peers. If the “Miracle at Medinah, ” Europe’s victory against the US in the Ryder Cup, is considered one of the best comebacks in sports history, something akin to it may be required for the European equity market’s outperformance to hold.Bear in mind that the S&P 500 didn’t drop as much as the Stoxx 600 in early August, and has beaten the European benchmark every year since 2015.
Superior earnings growth, massive share buybacks and fiscal incentives in the US are partly responsible, while European stocks have been dragged by a string of political crises and sluggish economic growth.
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