Does Europe have room to push higher?

Georgios Mouskoundi of Dolfin

Georgios Mouskoundi of Dolfin

For many the Global Financial Crisis is a distant memory, having just seen the longest bull market in history. These extraordinary gains were achieved despite a difficult economic and political backdrop over the past decade. Recently the prospect of trade wars, a surging US dollar, rising interest rates and the withdrawal of stimulus by central banks have rattled - but (so far) failed to derail - the bull run. While the S&P 500 has rallied some 300% from its March 2009 bottom, Europe has lagged.

Though some commentators have favoured Europe, citing factors such as attractive valuations and improving earnings, employing this strategy would have failed to generate comparable equity returns.  One factor is US banks have rebounded significantly faster than their European counterparts, with the latter shackled by rigid balance sheets and bad loans in southern Europe. The US has also enjoyed the benefit of having tech-heavy indices, especially in the time of FAANGs and general sector strength over the past decade. Technology names make up over a quarter of the S&P 500, but under 5% of...

To continue reading this article...

Join Investment Week

  • Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
  • Get ahead of regulatory and technological changes affecting fund management
  • Important and breaking news stories selected by the editors delivered straight to your inbox each day
  • Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
  • Be the first to hear about our extensive events schedule and awards programmes

Join now


Already an Investment Week


More on Europe

European-focused investment grade and high yield credit have highest inflows since April 2020.

Fixed income dominates ETF flows in July

Accounted for $32.5bn

clock 08 August 2022 • 2 min read
BlackRock lost nearly €2.9bn over the month.

Europe-domiciled funds suffer worst month since March 2020

Outflows of €47.7bn

clock 25 July 2022 • 1 min read
Chris Brightman is the CIO and CEO of Research Affiliates

Research Affiliates: Real interest rates will remain higher even after inflation is tamed

Tougher conditions for capital markets

clock 22 July 2022 • 4 min read