The "Trump Trade" is American in origin but global in nature, driving everything from investor bets on the world economy to international construction firms bidding for projects like the infamous Mexico wall.
So it's not surprising to see investor bearishness spread from New York to London, Paris and Frankfurt on Wednesday. After weeks of gains since the property mogul's election, banks, autos and energy stocks have been battered. Safe havens like utilities are in demand.
But it's important to remember there are real differences between the factors supporting longer-term optimism in Europe and those in the U.S.
European companies don't need Donald Trump to deliver their recovery. A reality check for the very rosy earnings estimates in the U.S. doesn't have to mean a hard landing for Europe.
Set aside Europe's politics for a moment and look at profit. After a lost decade, firms are playing catch-up. They are riding a recovery in domestic demand, a weaker euro and low borrowing costs.
In the last three months of 2016, the biggest euro zone firms reported a 12 percent rise in earnings per share, more than the 5 percent increase across the Atlantic.
Is this momentum likely to change anytime soon? It's hard to see how. By now, analysts would usually be marking down their optimistic forecasts for European earnings, but they're not. In fact, it's the U.S., where bumper profit growth seems hard to square with a strong dollar, that's seeing downgrades.
According to strategists at UBS Group AG, Europe is showing genuine resilience. They expect euro-zone GDP to grow 1.5 percent this year and point out purchasing managers' indexes in the region are at their highest in about six years.
Renewed confidence can be seen everywhere from toll-booth operators to mortgage lenders. France's Vinci SA -- which decided against working on Trump's wall -- reported bumper profit growth for last year and said the long-suffering French building market should recover in 2017.
Eurozone banks are enjoying rising private loan growth -- just as U.S. credit growth is stalling. True, optimism over U.S. rate hikes has helped investment banks like Deutsche Bank AG and Barclays Plc, but for now a 1 percent stock-market drop and a rise in volatility hardly spells doom for their traders.
Yet for all this, European stocks still trade at deep discounts to book value relative to their U.S. peers, a trend my colleague Blaise Robinson noted back in January.
We shouldn't dismiss the political fears that go some way to explaining that difference. French and German elections are still looming. There's also the risk that currency tailwinds could turn to headwinds if bets on the European Central Bank reeling in stimulus gain pace.
But we've argued before that political risk can be a positive thing if voters go for moderates. The election in the Netherlands and current polls in France seem to bear that out.
And the Bloomberg euro index has been on the rise since mid-February, with few visible negative effects on companies in the region. The euro's rise looks increasingly like a barometer of the bloc's health and can be absorbed by corporates, JPMorgan Chase & Co. strategists argue.
Obviously nobody in Europe would rejoice at a sustained sell-off in the U.S., or a negative re-set of global growth expectations. But the Trump trade should be able to cool off without wreaking havoc across the Atlantic.
This column does not necessarily reflect the opinion of Bloomberg LP and its owners.
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