Opportunity of European Stock Funds

In the past year, many markets have regained their heavy losses in March 2020, or even hit new highs. However, the performance of European stock markets has been relatively bleak. The legal person said that the covid-19 has repeatedly affected the trend of financial markets. Even if the UK and Europe reach a trade agreement, the UK will leave the EU. Later, European companies will have a period of adaptation. European stocks are expected to remain volatile in the short-term, but they can appropriately choose the best ESG themes and oversold industries to wait for the dawn.

European countries are still under the shadow of the covid-19 in the near future. Experts believes that the epidemic in Europe seems to be serious, but because most of the company’s revenue mainly comes from overseas markets, recovery has begun in other regions. Under the circumstances, stocks in Europe, the United Kingdom and other places have attracted the attention of investors due to the upward revision of corporate earnings forecasts. However, the market has not yet fully reflected the recovery of earnings, which has created a good space for investment to rise.

Under the circumstance of repeated epidemics, it is expected that Europe will alternate between easing and austerity. Although the recovery of economic activities will slow down due to the closure of the city in the short term, it will continue to rebound after the closure. In addition, news on vaccine development progress, Monetary policy and stimulus policies will still support economic recovery.

The PGIM Jennison team pointed out that the OECD leading indicators show that the second epidemic has brought a greater impact on the European economy, which is dominated by domestic demand. Among them, the leading indicators of Germany, which rely on exports, have risen, but the growth rate has significantly slowed down, while France and Italy are still There is no obvious improvement. As for the UK, it is the lowest performer among European countries.

The PGIM Jennison team believes that in the future, with the release of market rescue measures and vaccines, there is a chance that European stocks will get rid of the 2020 fatigue in 2021. It is recommended that investors continue to pay attention to the trend of economic data in the euro zone and the rescue policy in the future. And the positive impact on the market after the vaccine is launched.

Baida Investment Advisory believes that the prospects for Europe and the United Kingdom are still challenging. Although the Brexit agreement reached at the end of 2020 reduces some of the risks that threaten the region, inflation should not be a problem, but because of the massive unemployment and the operation of monetary policy Lag, price pressures will not be worthy of attention until 2022.


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