FXStreet reports that according to economists at Charles Schwab, Europe is poised to outperform, as the new economic cycle has seen stock market leadership pass from the US to Europe.

“European countries are only now starting to ease their restrictions on economic activity just as Europe’s largest-ever stimulus plan is about to be deployed. This suggests eurozone growth still has some way to go before peaking, and that eurozone stocks likely can still deliver further gains after outperforming in the first half of the year.” 

“Continued solid growth combined with signs that inflationary pressure may be transitory could ease concerns that central banks will tighten policy prematurely, a fear that weighed on emerging market stocks in the first half of the year.”

“Among the risks to economic expansion is the prevalence of COVID-19 variants, and potential for antibodies to wane over time, which could lead to waves of infection in the late fall/winter.”