Quick Take: European Stocks Are Just Getting Started
NEW YORK (TheStreet) -- Investors have been fleeing to U.S. equities in 2013, but is it time to look elsewhere? TheStreet's Gregg Greenberg discusses international investment opportunities with Chris Wolfe, CIO of Merrill Lynch Private Banking.
Although the S&P 500 has done well, large cap European stocks have actually outperformed the index over the past twelve months.
Wolfe said the European economy is at a low point but at last is beginning to recover and looks to have put in a bottom.
Look at Purchasing Manager Index data, he said the economic activity has begun to swing into positive territory, with increased spending fueling a turnaround.But aren't the unemployment levels incredibly high, especially for areas for like Spain and Greece? Yes, said Wolfe, but he added that the jobs data are a lagging indicator, whereas the PMI data are a leading indicator. Eventually, the former will show improvement and follow the latter as time goes on. Wolfe also said that Mario Draghi, head of the European Central Bank, will be vital for the European recovery. Looking at potential investments, Wolfe said that stocks of European financial companies are undervalued but will take time to recover. He said that he likes exporters and companies with exposure to consumers. -- Written by Bret Kenwell in Petoskey, Mich. Follow @BretKenwell
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