Europe, What A Drag!

Check out the accompanying pdf and chart collection. Executive Summary: The Eurozone’s economic outlook has darkened, and we’re not nearly as bullish on European equities as one year ago. … The ECB’s interest rate hikes so far have triggered a technical recession, which is bound to worsen because the region’s stubbornly high inflation implies no end to the tightening in sight. … Other red flags: Analysts have been cutting consensus earnings estimates; high interest rates have depressed demand for business loans to 2008 levels; Europe’s energy resilience could be challenged this winter; and the GDP of Europe’s biggest economy, Germany, is projected to contract this year. … Risks associated with China trade present yet another headwind for the European economy.