Strategists Overweight European Stocks Over the US for the First Half of 2024. “It’s More Than a Tactical View”
This is according to Maximilian Uleer, Head of European Equity and Asset Strategy at Deutsche Bank, who spoke to CNBC’s “Squawk Box Europe.”
The background to this positioning, he says, is a belief that Europe’s stock markets will perform stronger than the US markets during the first half of 2024.
It should be noted that the pan-European Stoxx 600 index has risen by 12.9 percent so far this year, while the broad US benchmark index S&P 500 is up by 22.6 percent.
Less Positive Vibes in the US Than in Europe
Regarding the overweight in Europe, strategists justify it by stating that “things are getting less bad” in Europe and that this trend is expected to continue.
This is according to Ankit Gheedia, Head of Equity Strategy at BNP Paribas, who spoke to Reuters.
“In the US, it’s probably going to be less good,” reasons the stock market professional.
Stock market experts are aware that Europe faces some headwinds that must be overcome, yet strategists note that the direction of economic statistics looks more interesting in the European market than in the US, for example, the inflation figures.
European Multiple Discounts in the Pot
Maximilian Uleer from Deutsche Bank explains in the CNBC interview that investors will “start looking for relative value deals.”
The European stock market is also attractive because there is a significant multiple discount compared to the US in the first half of next year, according to the professional, who believes it will then level out again.
An interesting aspect highlighted by CNBC is that the German economy, Europe’s largest, is in crisis, but the Frankfurt Stock Exchange (DAX) has nevertheless reached a record high level in December.