Even a near-record discount for European stocks relative to the US isn’t proving enough to entice investors worried about a slowing economy and weakening profits
Banks have been among the few beneficiaries of central banks’ aggressive interest-rate hikes to tame inflation. Italian banks have enjoyed rising net interest margins without always sharing their bounties with depositors. In August, Italy joined a few other European governments in imposing a controversial windfall tax on its banking sector.
The outlook for European
equities isn t pretty as an earnings recession looks likely
along with a prolonged period of high interest rates, but
investors say much of the bad economic news is priced in.