Europe Stocks the Clear Winners Amid Trump’s Trade War

Stock markets in Germany and other parts of Europe are staging a world-beating rally, significantly outperforming the S&P 500 this year as President Trump’s trade war strategy appears to be backfiring, Karen Friar reported for Yahoo Finance.

Five months into the year, eight of the world’s ten best-performing stock markets are in Europe.  Photo: Tilemahos Efthimiadis Flickr

According to Bloomberg, Europe’s equities have emerged as clear global winners, with the region’s economic outlook brightening just as the U.S. financial markets falter under the weight of trade-related uncertainty.

Five months into the year, eight of the world’s ten best-performing stock markets are in Europe, based on Bloomberg data.

That list includes Germany’s DAX Index, which has rallied more than 30% in dollar terms, as well as markets in Slovenia, Poland, Greece, and Hungary.

The pan-European Stoxx 600 Index is outperforming the S&P 500 by a record 18 percentage points in dollar terms. Analysts credit the surge to Germany’s historic fiscal stimulus plans and a strengthening euro.

Market participants say the rally may have more room to run, citing resilient corporate earnings and attractive valuations as key advantages in a time of growing concern over U.S. trade and fiscal policy.

“Europe is back on the map,” said Frederique Carrier, head of investment strategy for RBC Wealth Management in the British Isles and Asia. “We are getting more questions about Europe now over the last two months than we did over the last 10 years.”