Surprising the upside
Europe may have the momentum, valuation and growth to continue to outperform.
Published May 23 2023
Question: What's the outlook for Europe?
Martin Schulz: Europe has actually been surprising the upside. A year ago, after the Russian invasion of Ukraine, things looked pretty bad in Europe. You had high energy prices, you had all kinds of issues, geopolitical and otherwise, supply chain. But what's interesting is Europe has actually outperformed relative to expectations. And in fact, Europe, more recently, has outperformed the U.S. And what's really surprising is NASDAQ and Europe are the outperformers relative to the rest of the world. And so Europe is really the surprise factor fuel in the global economy right now. The ECB will be raising rates, and they're fairly hawkish, but we still believe that we've got the momentum, the valuation, and the growth that will allow Europe to continue to outperform. We're looking at markets such as Norway, Germany, France. And in fact, Europe is at its highest level of exposure in our international equities that we've had in over five years.