Where now for European equities?

EUROPE

European equities have re-rated despite little positive news and could go much higher when the earnings cycle turns, forecasts Olly Russ, co-founder of Argonaut Capital Partners.

Equity markets have been in a defiant mood so far this year. In Europe, the Citi Economic Surprise index (which compares actual events to economists’ predictions) has seen a slump as sharp and as sudden as anything witnessed over the last five years, reaching the lows last seen in summer last year, and indeed the summer before, when equity markets had the decency to follow suit. Back then, the eurozone crisis was looming large, and a disorderly eurozone break-up was being widely touted. This time though, the deteriorating economic situation in continental Europe has left equity markets s...