(MENAFN) BlackRock's iShares team in Europe, the Middle East, and Africa, led by Karim Shadid and Laura Cooper, has noted a resurgence in client funds flowing back into European markets. In an interview, the team stated their preference for European stocks from a tactical momentum perspective, citing the return of flows, including from US investors, as a key factor in their strategic positioning.
While the team still advises long-term investments in US stocks, they are also optimistic about the prospects for European markets. They anticipate further growth in the US stock market, particularly in sectors related to artificial intelligence. This sentiment aligns with the expectations of many market participants who foresee continued growth in US stock prices, driven by the strong earnings performance of major companies.
Historically, European stocks have lagged behind their US counterparts since the global financial crisis, with occasional periods of relative outperformance. Notably, there was a significant period of European stock market superiority lasting four months, from October 2022 to March 2023, during which the STOXX 600 index outperformed the S&P 500 by over 12 percentage points.
Looking ahead, analysts anticipate robust earnings growth for American companies in the coming year. Projections suggest an 8.3 percent increase in profits for S&P 500 companies in 2024. In comparison, European companies listed on the STOXX 600 index are expected to experience more modest profit growth, projected at 4 percent for the same period. These insights are based on data compiled by Bloomberg Intelligence.
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