The European economy is also heavily dependent on its international dependence. On the export side, the luxury and spirits sectors were penalized by the slowdown in Chinese growth. The turnover of these sectors is dependent on global growth. “There is also the question of Europe’s energy dependence. While the United States is capable of supplying itself almost independently, European economies are dependent on gas and oil prices which are set externally. of their borders”pin Guillaume Duchesne.
European growth is also weaker than that of the American economy. For 2024, growth of 0.8% is expected in Europe compared to 2.6% in the United States. These elements encourage managers to turn instead to American markets.
Positive points
There are, however, some positive points that can be noted. In the short term, this weak growth in Europe triggered a reduction in interest rates by the ECB. This is a positive factor for the stock markets. “We do not favor a scenario of recession or economic contraction in Europe. Despite the drop in rates, consumption is at half mast and the savings rate of Europeans is higher than that of Americans. We do not have no strong conviction on Europe However, two elements, namely the drop in rates and the more attractive level of valuations compared to the United States, offer investment opportunities in this region.estimates this manager.
The Fed cuts rates again, the day after Trump’s election
European markets also remain dependent on geopolitical risks. We must also remain attentive to the evolution of State debt. “The markets, however, do not seem anxious about this situation. They are not counting on a sovereign debt crisis scenario like in 2011”specifies Guillaume Duchesne.
For investors residing in Europe, it is recommended to compose portfolios of 55% in American securities and 45% in European securities. This manager favors large capitalizations oriented towards exports and industry. He stays away from financial stocks and the automobile sector. The bank’s ESG policy also avoids investments in controversial sectors such as shale gas, arms or coal.
