European valuations may be appealing, but they are no bargain

European economic data has been largely positive.

After showing signs of slowing last autumn, the European economy has shrugged off fears of weaker growth; the European Composite, Services, Manufacturing and Purchasing Managers surveys have all shown a steady improvement since their September 2019 nadirs. Europe still offers fertile ground for investors This is due to drivers that would indicate a return to better economic conditions. These include the lessening of the risk of a trade war following the phase-one trade deal between the US and China, announced on 13 December. Another driver is the receding of European political risk...