Nothing Breaks… But Nothing Works Either
A tricky backdrop
Europe continues to lag, with the early-year outperformance now fully reversed as the US pushes higher. Growth signals have softened meaningfully – consumer confidence has dropped sharply, German IFO missed, and broader activity data surprised to the downside – leaving the ECB stuck between weaker growth and still-sticky inflation. It’s a tricky backdrop, and for now, the market is reflecting that uncertainty. Earnings have improved from a slow start but still trail the US, with a more muted beat/miss profile and less supportive revisions. There’s still plenty of single-name opportunity, but until the macro backdrop stabilizes, Europe feels more like a market to pick spots rather than chase broadly.