The STOXX 50 has notched a solid gain so far this year, extending its strong momentum from the previous two years. The eurozone continues on the path of recovery following a war between Russia and Ukraine.
Still the valuation gap across the pond is at a historical high level as the bloc has returned to pre-pandemic low growth. The thriving south and stagnant north contrasts sharply with the old economic landscape.
Despite that, France’s CAC 40 underperformed Germany’s DAX 40 significantly in 2024, partly due to the struggling luxury industry. Richemont’s rosy Q4 report helped ease the concerns over “consumption downgrade.”
Some analysts believe the downturn in luxury goods sales in 2024 was more cyclical than structural. However, others remain cautious about the prolonged weak demand in China given persistently anaemic CPI readings.
On the other hand, SAP, which helped DAX rise to a fresh all-time high earlier this month, is forming a bubble with a three-digit P/E ratio. That means the equity market may be more aligned with the country’s fundamentals this year.
There is a great uncertainty around the European stock markets. The combined effect of Trump’s approach to the rest of the world and Europe’s political dynamics will be pivotal to investment decision.
EBC Financial Risk Management Disclaimer: This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by EBC Financial News or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.EBC Markets Briefing | European equities look for next catalyst
The STOXX 50 has notched a solid gain so far this year, extending its strong momentum from the previous two years. The eurozone continues on the path of recovery following a war between Russia and Ukraine.
Still the valuation gap across the pond is at a historical high level as the bloc has returned to pre-pandemic low growth. The thriving south and stagnant north contrasts sharply with the old economic landscape.
Despite that, France’s CAC 40 underperformed Germany’s DAX 40 significantly in 2024, partly due to the struggling luxury industry. Richemont’s rosy Q4 report helped ease the concerns over “consumption downgrade.”
Some analysts believe the downturn in luxury goods sales in 2024 was more cyclical than structural. However, others remain cautious about the prolonged weak demand in China given persistently anaemic CPI readings.
On the other hand, SAP, which helped DAX rise to a fresh all-time high earlier this month, is forming a bubble with a three-digit P/E ratio. That means the equity market may be more aligned with the country’s fundamentals this year.
There is a great uncertainty around the European stock markets. The combined effect of Trump’s approach to the rest of the world and Europe’s political dynamics will be pivotal to investment decision.
EBC Financial Risk Management Disclaimer: This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by EBC Financial News or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.Contact:
mkt@ebc.comDisclaimer:
Investment involves risk. The content of this report is not an investment advice and does not constitute any offer or solicitation to offer or recommendation of any investment product.
Publication date:
2025-01-27 12:16:17 (GMT)
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