Are we heading for a Europe-led correction?

Investors should lower exposure to Europe

A shock profit alert from EasyJet and increasing political uncertainty ahead of European elections next month have heightened the risk of significant underperformance by European equities this year.

Earlier this month the low-cost airline blamed Brexit as well as wider macroeconomic uncertainty for weakening passenger demand and lower ticket yields across Europe. The news followed a recent spate of worse-than-expected economic data from Europe and its largest economy, Germany, where the manufacturing sector contracted at the fastest rate in more than six years. Should investors care about European equities? Both developments reinforce the risks of an impending recession throughout the region just as the political clouds darken. The recent six-month extension granted to the UK to ...