Jurrien Timmer’s view on Europe
Fidelity’s Jurrien Timmer said in a recent interview that he is bullish on Europe (VGK) (IEV). The improving economic indicators in Europe (HEDJ) (EZU) are making market participants bullish on the European economy.
The Eurozone economy has faced various challenges in recent years. Low economic growth, low consumer spending, and deflation have been major concerns for European economies. However, in the present scenario, both the Eurozone’s manufacturing and services PMIs are showing strong improvements. The consumer confidence index is also improving gradually. The inflation index and economic growth are also recovering. The cyclical recovery in the economy is a positive sign.
In the present scenario, Europe is also providing attractive valuations as compared to other nations. The equity market is expected to provide strong earnings growth in the near future. The current price-to-earnings multiple of the Euro Stoxx 600 is at 17.05x, and the S&P 500 (SPY) Index is at 21.21x. The dividend yield of the Euro Stoxx 600 is at 3.1%, and the S&P 500 Index is at 2.4%. Larry Fink, CEO of BlackRock (BLK), recently said that he sees better value in Europe than the US (SPY) (COMP-INDEX).
You may be interested to read, Bill Gross: Equity Markets Are Priced for Too Much Hope.