Eurozone equities expected to outperform in 2015

摘要

1. We expect Eurozone equities to somewhat outperform US equities in 2015, so long as downside risks (such as a Greek exit from the Eurozone) do not materialise. 2. Absolute valuation measures suggest that Eurozone stocks are fair-to-slightly cheap, limiting their upward potential. But relative to US stocks, they appear more attractive. This suggests potential for favourable portfolio reallocations and a possible lift to equity prices in the region. 3. That said, earnings growth is likely to provide the main support to Eurozone equity performance in 2015, against a backdrop of converging earnings cycles between the US and the Eurozone.