European stocks are looking more attractive to investors.


Europe has a bad rep with investors. For years, asset managers and bank strategists have characterized the region by its anemic growth rate and shaky political union, and steered investors away.

Now, a crisis has turned into an unlikely investment opportunity as the region appears to have handled the pandemic better than some other parts of the world. In the past few months, European assets have staged a comeback, writes Eshe Nelson, who gives two reasons for the turnaround:

The euro has gained more than 5 percent against the dollar so far this year, according to FactSet data. Since late May, Europe’s stock market has recorded stronger gains than the S&P 500 index, after taking the strength of the euro into account.

Investors are starting to take advantage of the relative cheapness of European equities, but a sustained recovery in either stock market will depend on consumer and business confidence returning, which would in turn stir economic activity.



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