(BFM Stock Exchange) – European markets have progressed more than Wall Street in the first weeks of 2025. This good departure cannot be extrapolated throughout the year, according to several analysts who point to structural difficulties in Europe.

European actions have displayed their best performance in 10 years against Wall Street in the first six weeks of 2025. But it is not certain that this good start augurs a real catch -up during the year, according to several analysts that evoke structural problems.

At the beginning of 2025, investors took advantage of the extreme valuation differences between European and American actions: incoming flows reach their second higher in 25 years on January, operators betting in several catalysts this year.

Among them, a relaxation of German budgetary rules, the end of the war in Ukraine or the American customs tariffs that are less than expected and which could fuel gains in Europe.

The fall in American technological values ​​has also sparked a rotation outside the very large technology groups, benefiting Europe. The Stoxx 600 increased by 5.5% over the first six weeks of 2025, compared to 2.7% for the S&P 500.

“Where is the marginal seller? Today, everyone is very under-noise in Europe”, notes Marc Halperin, manager at Edmond de Rothschild Am, who strengthened in December his positions in the cyclical sectors in the euro zone .

A rebound in anticipated indicators

The manager anticipates a rebound in advanced indicators for 2025, a drop in European central bank rates while the federal reserve would maintain its rates at their current levels and a possible ceasefire in Ukraine which would contribute to a drop in prices of energy in Europe.

“Europe is focused on sectors like the automobile, with significant growth potential because the sector is very decorated. The high performance of the start of the year could continue in the weeks or months to come,” hopes Marc Halperin.

Michele Morganti, strategist at Generali Investments, adds that less growth in the results of American technological groups and support measures for the Chinese economy could encourage this movement to Europe.

The rally is wide, adds Sensrader, which emphasizes that the ratio between increases and falling over European shares is up, as well as the number of shares negotiating at a price higher than their average over 50 days.

These technical indicators historically report a pursuit of gains over a period of one to three months, adds the group.

Structural problems in the background

Hertta Alava, strategist at Nordea, also anticipates a continuation of the performance of European actions in the coming months, the valuations remaining attractive while the growth in profits increases, filling part of the gap with American actions.

The MSCI Europe index is negotiated the expected benefits at 14 times, an almost record discount of 37.5% compared to the MSCI USA.

Whatever the performance of European actions, Wall Street should nevertheless remain in the dominant position. Michele Morganti recalls that structural problems remain.

“Europe is always faced with problems such as lower energy independence, a stronger governance, (…) energy and fragmented capital markets, lower population growth and investment in more technology weak “, lists the strategist.

According to LSEG IBES forecasts, growth in European profits is expected to accelerate considerably this year to 7.9%, against 1% last year, after a drop of 3.9% in 2023.

At 14.1% against more than 10% last year, profits growth in the United States will remain higher.

(With Reuters)