European stocks are ignored and cheap – but possibly not for long

European stocks are out of favour, with some analysts predicting their worst year since 2008. But the worst of the sell-off could be over, and European value shares in particular look appealing.

Hermes models at Paris Fashion Week
Shares in Hermès have bounced by more than 30% this summer
(Image credit: © Edward Berthelot/Getty Images)

Recession is “just round the corner” in the eurozone, says Jack Allen-Reynolds of Capital Economics. Weakening business surveys, higher gas prices and tighter monetary policy herald a tough second half.

The Euro Stoxx 50 index of euro-area blue chips has fallen 13% this year. European shares are out of favour with global money managers, says Michael Msika on Bloomberg. Allocations to euro-area equities have hit their lowest level since June 2012. Analysts at UBS think that European stocks are heading for their worst year since 2008.

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Markets editor

Alex is an investment writer who has been contributing to MoneyWeek since 2015. He has been the magazine’s markets editor since 2019. 

Alex has a passion for demystifying the often arcane world of finance for a general readership. While financial media tends to focus compulsively on the latest trend, the best opportunities can lie forgotten elsewhere. 

He is especially interested in European equities – where his fluent French helps him to cover the continent’s largest bourse – and emerging markets, where his experience living in Beijing, and conversational Chinese, prove useful. 

Hailing from Leeds, he studied Philosophy, Politics and Economics at the University of Oxford. He also holds a Master of Public Health from the University of Manchester.