Europe’s Equity Rally Masks Growing Divergence Across National Markets
Our assessment of European equities—represented by the Euro Stoxx 50—remains broadly constructive, with a Health Score of 61.8 and a Directional Signal of +23.6. The indication is that the market remains in recovery. Everything is internally consistent. But stopping there would overlook the most interesting part of the story. Over the past three months, European equity markets have delivered markedly different signals. They have not moved as a single market.
Today, the gap between the strongest and weakest of Europe’s core equity markets exceeds 11 Health Score points. Why? The answer lies in a combination of different market drivers, sector exposures that have responded very differently to the current macroeconomic backdrop, and one country—Germany—that has followed a path increasingly detached from the rest of the continent over the past ninety days.
Let’s begin with the leaders.
The Belgian equity market is the strongest in our sample, with a Health Score of 66.1 and a Directional Signal of +32.1, while directional indicators remain positive across every time horizon.
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