The "positive signals" to be found in Europe

clock • 2 min read

While macroeconomic concerns remain, the outlook for European equities is now more positive than a year ago.

One of the main reasons for this is that stock valuations are significantly lower, due to what we believe may be excessive pessimism. According to JP Morgan, in July 2018 the P/E multiple on small- and mid-cap Europe ex-UK equities was 19x, while by the beginning of March this year the one-year forward P/E multiple was 15.4x. This represents a drop of almost 20% in valuations. Slowing global growth, combined with concern about trade tensions between the US and China, has undermined investor confidence. Despite this the global economy has proved more resilient than expected with the...

To continue reading this article...

Join Investment Week for free

  • 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
member?

Login

More on Europe

FundCalibre's Schooling Latter: The shifting sentiment in Europe

FundCalibre's Schooling Latter: The shifting sentiment in Europe

Portfolio picks

Juliet Schooling Latter
clock 27 March 2024 • 4 min read
Timing of ECB rate cuts in doubt as core eurozone inflation measure disappoints

Timing of ECB rate cuts in doubt as core eurozone inflation measure disappoints

Services price inflation remains sticky

Valeria Martinez
clock 01 February 2024 • 1 min read
Eurozone inflation rises to 2.9%

Eurozone inflation rises to 2.9%

Driven by energy prices

Elliot Gulliver-Needham
clock 05 January 2024 • 1 min read
Trustpilot