Europe looks cheap if the ECB pulls out the unlimited backstop bazooka

Despite my increased pessimism on Europe, it is clear that European equities are undervalued compared to the US. My call at the beginning of the year was for European equities to outperform because of relative value vis-a-vis the United States. At the time, I believed European policy makers would be forced to monetise for fear of the euro breaking up. But as European policy errors have mounted, that trade has gone a bit pear-shaped. The US has outperformed thus far.

Nonetheless, I think this ...


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