Europe, despite its intention to put past crises to rest, may end up being a major economic flashpoint in 2021. With sudden developments in Italian politics, battles over vaccinations and bonds that guarantee a loss, investors may be forgiven for expecting the once benign region to be the next big source of volatility. Yet there is an equal argument for a European renaissance with pan-European stimulus, attractively valued equities and increasing demand for sustainable investing; the argument is not quite as simple as it seems. In this note we aim to highlight key data-points and issues which are likely to determine near- and long-term returns from European equities. We hope to highlight the possibility that European stock markets may be full of opportunities, even if the macro outlook is cloudy.
