Wall Street expects European stocks to outperform the U.S. this year. Here’s why

Wall Street expects European stocks to outperform the U.S. this year. Here’s why

The vast majority of investment banks are backing European stocks to outperform their U.S. peers through the remainder of the year and into 2022, as the region's economic recovery and historic stimulus converge. Recent economic data out of the euro zone suggests its recovery is gathering steam, after a sluggish start due to persistent lockdown measures and a slow vaccine rollout. Euro area PMI (purchasing managers' index) readings earlier this week came in at their highest on record, implying rapid growth in business activity across the bloc in June and offering the latest in a series of positive data surprises. This has led to tangible action from investors. Mutual fund flows into European stocks year-to-date have been at their strongest for six years, with U.S. and Asian investors reversing recent trends to become net buyers of European shares, according to analysis by Goldman Sachs. The pan-European Stoxx 600 index is up more than 14% year-to date. In a research note in April, over the next 12 months. The index is up around 3.7% since the publication of the note. Analysts at all major regions this year for the first time in more than two decades. "With global investors structurally underweight