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Eurozone equities expected to outperform in 2015
Publication year - 2015
Publication title -
economic outlook
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.1
H-Index - 8
eISSN - 1468-0319
pISSN - 0140-489X
DOI - 10.1111/1468-0319.12135
Subject(s) - economics , earnings , equity (law) , limiting , downside risk , monetary economics , earnings growth , portfolio , valuation effects , valuation (finance) , financial economics , finance , mechanical engineering , political science , law , engineering
We expect Eurozone equities to somewhat outperform US equities in 2015, so long as downside risks (such as a Greek exit from the Eurozone) do not materialise. Absolute valuation measures suggest that Eurozone stocks are fair‐to‐slightly cheap, limiting their upward potential. But relative to US stocks, they appear more attractive. This suggests potential for favourable portfolio reallocations and a possible lift to equity prices in the region. That said, earnings growth is likely to provide the main support to Eurozone equity performance in 2015, against a backdrop of converging earnings cycles between the US and the Eurozone.