One of the big stories in July was the improvement in European economic data.
Last week, eurozone PMI surveys suggested that the euro area manufacturing sector stopped contracting and began expanding in last month.
The latest readings have some investors hopeful that the euro area economy is finally beginning to turn around after years of stagnation and recession.
In a note to clients this morning, Oppenheimer chief market strategist John Stoltzfus argues that “investing in Europe today might be parallel to investing stateside just a few years ago ahead of the big run-up.”
Stoltzfus writes (emphasis added):
Europe is increasingly on investors’ minds as the IMF and others look for stabilisation and the region’s economic recovery to begin in this year’s second half.
Stateside investors are beginning to consider investments in Europe and elsewhere ex-U.S. for diversification once again as multiples expand stateside and hints that conditions are beginning to improve outside of the U.S., particularly in the developed European markets, emanate. It appears to us that investing in Europe today might be parallel to investing stateside just a few years ago ahead of the big run-up. European markets as represented by the Stoxx 600 have moved 28.4% in the past 12 months through Friday translated into U.S .dollars.
“Since the start of the year, that market has moved higher by 9.41% in U.S. dollar terms potentially offering further upside as the regional economy and the economies of the region’s export customers improve,” says Stoltzfus. “Stay tuned.”
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