J.P. Morgan strategist says Eurozone stocks will see new buying opportunities.

date
05/08/2025
Morgan Stanley strategist said that after recent poor performance, Eurozone stocks will see another buying opportunity in the next 1-2 months. However, before that, the risk of stagflation needs to be "resolved," the team led by Mislav Matejka wrote in a report. Germany's fiscal expansion is a "clear support," trade negotiations have made progress, and natural gas prices remain low, the strategists said. "Defense stocks may see profit-taking, but we recommend taking a structural long position in the sector. Over the past few months, we have maintained a tactically neutral stance on the Eurozone relative to the United States, but from a 1-2 year perspective, we should take advantage of the pullback opportunity in SX5E to increase exposure."