European stocks have lagged American markets amid a quicker pace of vaccination in the US.
The more cyclical European markets are set for outperformance ahead, however, says Credit Suisse.
Credit Suisse analysts recently revealed where they see the best opportunities on the continent.
Stocks in the US have seen huge appreciation since bottoming in March 2020 as vaccinations against COVID-19 ramp up and the country begins to reopen. Over the last 14 months, the S&P 500 is up 80% thanks in large part to tech stocks dominance during the stay-at-home period.
In continental Europe, it s been a different story. Vaccine rollouts have been slower as has the economic recovery and stocks there haven t enjoyed the same impressive returns. Since March 2020 the STOXX Euro 600 index is up 50%, only recently passing pre-COVID-19 highs.
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BlackRock says the economic recovery is actually a powerful restart underestimated by the markets.
Pent-up demand, the uniqueness of the 2020 shock, and inflation dynamics characterize the restart.
With this in mind, they are bullish on US stocks, real assets, and emerging market equities.
After about one year of living under unprecedented economic uncertainty induced by the pandemic, it seems like we are starting to see a light at the end of the tunnel as we approach a more familiar lifestyle while Covid cases fall.
This isn t the first time economies have had to heal themselves from the damages wrought by recessions. So far in the 21st century, the US has exited two crises that triggered fear and volatility within markets, including the early 2000s