European market rally: now or never


After several months of hesitancy during which European stockmarket performance was consistently disappointing, left behind by almost all other major global asset classes, could there be more encouragement for investors in last few weeks of the year? Recent developments mean that it is very tempting to predict a rally. That is especially the case since, unless the European markets show signs of waking up soon, it will become increasingly difficult for European investors to maintain hopes of a long-overdue rally.

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Not much on offer to take advantage of a potential upturn in the European market

After taking a beating over the past few days, European equities should be well placed to take advantage of a rebound in world markets. Most specialists expect one, despite the instability of the past few days. In theory, all of the factors necessary for outperformance are in place: European stocks lag their worldwide counterparts, bond yields are still mostly negative on maturities up to five years – the lowest on the planet – and the economic outlook is favorable.

That said, with the German market relatively dear, bank stocks still suffering from low interest rates and many sectors well on their way to making up their lag, the range of attractive investments is limited. It’s not yet clear that Europe will fare better than the other regions of the world.

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