Could This Be Third Time Lucky for European Bulls?: Taking Stock

What a difference four years make. The last time a broad gauge of European stocks set a record high was in April 2015. At the time, David Cameron was U.K. prime minister, Donald Trump hadn’t announced his candidacy, Angela Merkel was set to become Time Magazine’s “Person of the Year,” and the Swiss National Bank had just abandoned its euro ceiling.

Fast-forward to now and the Stoxx Europe 600 is again making a run at that peak, as it did unsuccessfully in each of the past two years. This time could be different, even if we get another dip along the way. In support, the Fed has become increasingly dovish, the ECB is looking at new ways to help the economy, China is in stimulus mode and Brexit might soon find its epilogue. A vast majority of investors are underweight European equities ahead of the earnings season kicking off next week.