Europe has delivered a robust fourth-quarter earnings season, with many companies surpassing expectations, and is experiencing positive earnings and revenue revisions.
Since the beginning of 2025, European markets have outperformed the MSCI World Index. In this paper, we explore the various factors that could contribute to continued European outperformance, including the potential for fiscal stimulus and further monetary easing, the improving outlook for consumer confidence and energy prices, expectations for corporate earnings growth and a loosening of the regulatory burden, and the attractiveness of valuations compared to other regions.