Leaders' steps could drive 20% European equity rally

JPMAM economist Dan Morris says credible end to the crisis is in sight with progress made towards hitting three crucial benchmarks.

Equity markets could rally by up to 20% now Europe is seeing credible action towards a resolution for the eurozone crisis, said Dan Morris, global strategist at J.P. Morgan Asset Management. Recent equity market movements have been based on the eurozone’s leaders’ real steps towards a resolution of the crisis, after a series of empty promises from politicians to “do everything necessary”. “As an indicator of what the potential is for equity returns if things continue in this way, simply applying July’s market multiples, even on today’s lower earnings estimates, would mean nearly a 20%...