Keep an Open Mind on Europe

Friday, February 16th, 2024   Categories: , ,

Leading indicators suggest more upside than for the US

We have several indicators which suggest that Eurozone Equities could be about to generate a positive surprise. Our euro-denominated asset allocation model has upgraded global equities to overweight, chiefly because of some emerging weakness in German bunds. It is now more bullish on global equities than its dollar-denominated counterpart. Our global equity models still have the US as an overweight and the Eurozone as a neutral. There is only limited upside for the US but a lot more for the Eurozone, which has a much stronger uptrend and a better leading indicator. The positive mood is not yet supported by survey or hard economic data, but markets always move before this is published. We urge investors to keep an open mind about Europe, particularly Germany and the Eurozone.

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