The Unanticipated Strength of European Equities Amid Energy Price Surge
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In "Allocating to European Equities," BNP Paribas provides a robust analysis of the unexpected resilience of the European economy and equity markets during the dramatic rise in energy prices in 2022. Drawing a parallel to the US market following the OPEC oil shocks of the 1970s, the author details how, contrary to expectations of a recession and a collapse in corporate profits post the Ukraine invasion, the European economy demonstrated surprising endurance. Key insights include the region's successful avoidance of recession and the performance of purchasing managers’ indices.
Supporting Factors and Forecast Insights
BNP Paribas underscores several factors that underpinned the European economy's resilience, such as diversified energy sourcing, substantial fiscal support to households and businesses, and the region's strong momentum following the lifting of Covid lockdowns. Earnings forecasts also exhibited an unexpected rise, contributing to positive sentiment across financial and energy sectors. However, the author cautions that potential recovery in currencies may present challenges in the future, altering the balance of export earnings and imported inflation.
Embark on a fascinating journey into the heart of European equities by clicking 'Report.' Uncover BNP Paribas' expert insights on allocating resources in this dynamic and unexpectedly resilient market landscape.
