Europe Steps Up: Strong Markets, Growing Optimism, and Structural Tailwinds Ahead

Authored by Christoph Berger and Ferdinand Horneck of Allianz Global Investors, this outlook examines Europe’s equity resurgence and the evolving structural drivers behind it.

• Performance resilience: European equities have surged in 2025, outperforming U.S. peers in local currency terms despite tariffs and geopolitical strain.

• Earnings momentum: Analysts expect 2026 profit growth of 12%, narrowing the U.S.–EU gap amid accommodative policy and fiscal support.

• Structural reform: The EU Savings and Investment Union could foster deeper capital markets and sustained equity growth.

How might this momentum redefine Europe’s role in global equity leadership?