Europe Stocks Cheapest to U.S. Since ’04 as Growth Decouples

European equity valuations have fallen to the lowest levels since 2004 compared with the U.S., as economic forecasts between the two regions diverge by the most since 1998.

The Stoxx Europe 600 Index trades at 1.43 times book value, or assets minus liabilities, after falling 11 percent last year. That compares with 2.14 for the Standard & Poor’s 500 Index, according to data compiled by Bloomberg. The European gauge has been at least 30 percent cheaper for 69 straight days, the longest stretch in seven years. Economists forecast U.S. gross domestic product will expand 2.3 percent in 2012, compared with a 0.2 percent contraction in Europe.