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Morgan Stanley Warns European Stocks Cooling Down

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European shares may be the consensus pick for strong gains in 2014, but Morgan Stanley has downgraded the region’s equities to Neutral, expecting them to run out of steam.

While the bank prefers developed markets’ stocks over their emerging market peers, it believes Europe’s risk-reward profile is the worst among its peers Japan and the U.S., both of which it rates at Overweight.

“Europe remains under the threat of prolonged stagnation as deflation and low growth are likely to become entrenched in the absence of vigorous action from European policy makers,” it said in a note, calling its concern “Japanification,” a reference to the long economic stagnation in Japan.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza

@alfonso_forex

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