European Stock Market 2015
According to JPMorgan analyst Mislav Matejko European stock market 2015 had better prospects than the US stock market.
In the last couple of years, the leadership of the American stock markets was indisputable: stock index S&P 500 hit a record six years in a row, and the U.S. dollar was ahead of the growth rate among the major world currencies. Meanwhile, the Eurozone has the role of "ugly duckling", since a number of States were on the verge of economic crisis for several years, according to Marketwatch. Now the European stock market prospects seem more favorable, and this point of view has been getting the support of an increasing number of analysts, notes M. Matejko.
"Movement in the Eurozone has begun, but I think, that less than the half way is covered, says M. Matejko. - We believe that the positions of investors in European assets are far from excessive. Monetary flows began to return to the region not so long time ago, after significant outflows in the past year, as well as in the period of 2009-2012". On contrary, the investors position in American assets are almost absolutely high, and the outflow of funds from them is not observed, the expert notes.
European Stock Market 2015: Profits growth
M. Matejko also believes that the Eurozone economic activity will grow, both with the monetary support growth and the restore of the consumer confidence. An additional support to the region, he said, had the quantitative easing program, started by the ECB on the 9th of March.
The expert notes that in 2015, investors were actively reviewing the profit forecasts for European companies as uptrend, while the predictions for US companies were downtrend.
"It is interesting that for U.S. companies, even outside the oil sector, the profit forecasts were down, while for the Euro zone - up", - said the expert.
According to his estimates, the average growth rate of profits of European companies in 2015 was 15.3%. In comparison, for the US it was only 1.8%.
European Stock Market 2015: Banking sphere
The weak growth rate of wages and the weakening of the Euro against the USD was one of the supportive factors for the Eurozone and it has increased the bullish mood in the region’s financial markets.
The European Central Bank took the important decision and started the program of "quantitative easing" last year. The head of that organization, Mario Draghi, noticed that the time has come to move to real action to rescue the European economy. And, eventually, this time the ECB decided not to save.
Several days prior to the announcement of actual plans, the analysts predicted that the European quantitative easing program is going to last until the end of 2015 and it will be printed around 500 billion Euros, according to this program. But according to Mario Draghi, the purchase of distressed sovereign bonds is supposed to be performed until September 2016.
That means that Europe will print approximately 1.1 trillion. euro, at the rate of 60 billion Euros per month.
Evidently, the ECB President tried to convince the German bankers, that the move is supposed to save the EU economy from the third recession since the onset of the economic crisis in 2008.