- The Stoxx Europe 600 Index rose during every session last week, marking its longest winning streak since June. The benchmark has gained 11% in 2026, while Germany's, France's, and Italy's indices have reached record highs.
- European corporate earnings increased 17%, the strongest growth in four years, while regional economic momentum reached its highest level since March 2023.
- A Bank of America survey found that a net 2% of fund managers were overweight European equities, compared with a net 15% who were underweight in June.
- The Stoxx 600 now trades at 15 times projected earnings, its smallest discount to the S&P 500 in four years.
- Economic resilience and demand have exceeded market expectations, contributing to the positive sentiment around European equities.
- Around 75% of Stoxx 600 constituents trade above their 200-day moving averages, near the highest proportion recorded over the past decade outside major post-crisis recoveries.
- Cooling tensions between Washington and Tehran have improved sentiment, while lower oil prices since July have reduced inflation concerns.
- Possible Federal Reserve rate increases and doubts about Europe’s longer-term growth remain key risks.
European corporate earnings increased 17%, marking the strongest growth in four years, while regional economic momentum reached its highest level since March 2023.2
The Stoxx Europe 600 Index has experienced its longest winning streak since June, rising during every session last week and gaining 11% in 2026.1
“There is definite excitement about Europe,” said Helen Jewell, BlackRock’s international chief investment officer for fundamental equities, noting that economic resilience and demand have exceeded market expectations.5
A recent Bank of America survey revealed that a net 2% of fund managers are now overweight European equities, a significant shift from the 15% who were underweight in June.3
Additionally, around 75% of Stoxx 600 constituents are trading above their 200-day moving averages, indicating strong market participation.46
Factors such as cooling tensions between Washington and Tehran and lower oil prices since July have improved sentiment, while European banks have climbed 22% as investors seek alternatives to volatile U.S. technology stocks.7
The Stoxx 600 now trades at 15 times projected earnings, its smallest discount to the S&P 500 in four years. However, risks remain, including possible Federal Reserve rate increases and doubts about Europe’s longer-term growth.8
“BlackRock's Helen Jewell cites 'definite excitement about Europe,' with economic resilience exceeding expectations. A Bank of America survey shows fund managers turning overweight, while AI and bank stocks lead gains, though Fed rate hikes and Strait of Hormuz uncertainty remain risks.”
