European equities are caught between a bearish tactical setup and genuine structural bright spots, according to research circulating this week.
On the cautious side, analysts point to widening sovereign bond spreads as the main macro threat, with the Euro Stoxx 600 testing its 200-day moving average and little support below unless that spread pressure eases. A similar bearish read on the DAX cites soft German inflation data and warns of a potential break below 25,100.
A more constructive camp of research anchors its view in structural demand — AI investment and rising defence budgets. That spending is already visible in the data: Dutch industrial output has climbed to its highest level since before the war in Ukraine, and Germany is posting the Eurozone's strongest manufacturing growth, lifted by expanding NATO defence orders.
At the single-name level, one published view highlights a German AI-linked industrial that has reclaimed its 200-day moving average after a sharp correction, with research arguing the next resistance level is in play.
The two camps aren't fully at odds — the bearish call is conditional on spreads staying wide, while the bullish case rests on sector fundamentals over a longer horizon.