European equities are getting a cautiously constructive read from recently published research.
One strand of analysis leans mildly positive on the euro area, pointing to a solid earnings season with roughly 10% earnings growth ex-energy and German fiscal stimulus as key supports. The argument runs that expected ECB and Fed rate moves are already priced in, so stocks can absorb them — though the thesis hinges on PMIs, growth and earnings holding up, and the rally so far has been narrow.
Another camp treats the euro area as a neutral core position, useful mainly as a regional diversifier, with financials — a large chunk of the index — doing much of the heavy lifting.
Research is more upbeat on the UK: the recent budget cleared months of uncertainty, feared capital gains hikes and a wealth tax didn't materialise, and expectations are low enough that even modest growth could surprise to the upside.
On single stocks, technical analysts flag Merck KGaA breaking out to a 52-week high after weeks of consolidation, which they read as leaning toward further upside despite a longer downtrend since its 2021 peak.