European equities split the week between bulls leaning into structural tailwinds and bears flagging stagflation risk.
A bearish thread argued the DAX deserves a lower target — one note cut its June 2027 level to 26,300 — citing higher energy costs, fiscal strain, sticky inflation, and an ECB still tilted toward hikes while the Fed eases. That underweight case rests on Europe's rigid economic structure and inflation-sensitive investor base.
The bull case was broader. Researchers pointed to fiscal expansion, potential Iran and Ukraine ceasefires, and reduced oil sensitivity as reasons Europe could outperform. A detailed quality-compounder list flagged defense (Rheinmetall), grid and electrification (Nexans, Iberdrola), semiconductor sovereignty (ASML, ASM International), productivity plays (ASSA ABLOY, Nemetschek, Rational), and healthcare infrastructure (Roche, Lonza, Sartorius Stedim) as multi-year beneficiaries of policy-driven capex.
Small caps drew constructive views on reshoring and improving PMIs. UK equities were flagged as an overweight tilt. Ferrari was the notable single-name skeptic call after a poorly received EV launch.