J.P. Morgan Says It’s Time to Buy Eurozone Stocks
Analysts also recommend overweighting EM equities relative to developed markets, citing improving trade dynamics with China.

Quick overview
- J.P. Morgan equity strategists recommend investors refocus on European equities, viewing Eurozone stocks as a 'buying opportunity' after recent market consolidation.
- The Euro Stoxx 50 index is currently trading 6%-7% below its February peak, presenting attractive entry points for investors.
- While J.P. Morgan remains cautious due to stagflation risks, they anticipate a new upward cycle in Eurozone equities as Germany's stimulus takes effect.
- The bank also sees potential in emerging markets, particularly in Chinese tech, and recommends overweighting EM equities relative to developed markets.
J.P. Morgan equity strategists say it’s time for investors to refocus on European equities. In a recent report, they described Eurozone stocks as offering a “buying opportunity,” noting that recent market consolidation has created attractive entry points.
“It’s encouraging that over the past six months, Eurozone equities have gone through a digestion phase,” they wrote. The Euro Stoxx 50 index has stagnated in absolute terms and is now trading 6%–7% below its February peak, which, according to the bank, presents an interesting level to re-enter.
“Get ready to buy again in the Eurozone,” the report states plainly. After a period of consolidation in the Euro Stoxx 50, J.P. Morgan believes the moment is approaching to increase exposure to the region.
Eurozone vs. Wall Street
Strategists also highlighted the growing performance gap with U.S. equities. “This is especially notable compared to the U.S., where the S&P 500 has hit new highs and relative performance has steadily declined.” Back in March, J.P. Morgan had warned the Eurozone was tactically overbought and expected a consolidation, which they now view as a healthy normalization in fund flows that could lead to a new upward cycle.
The bank expects that momentum will return as Germany’s stimulus begins to kick in and credit conditions improve across the Eurozone, following previous monetary easing from the European Central Bank (ECB).
“Excess optimism has now faded, while U.S. tech earnings have largely been priced in, and AI-related factors are peaking. We believe a new buying opportunity in the Eurozone could emerge in the next one to two months, both in absolute terms and potentially relative to the U.S.,” the strategists concluded.
Still Cautious in the Short Term
J.P. Morgan is not diving in just yet. “We remain tactically cautious on the Euro Stoxx 50 due to lingering stagflation risks, but plan to add exposure in the coming 1–2 months,” they noted. Their forecast of a stagflationary environment in the second half of the year is becoming more plausible.
“Until recently, resilient data challenged that view, but the negative effects of tariffs may have simply been delayed, not avoided.” They warned that tariff-related headlines will persist, noting that the effective U.S. tariff rate is now at its highest in 100 years, and that final levels could still end up near the initially projected “Liberation Day” scenarios.
On Rates and the Fed
The strategists also reaffirmed their position on maintaining long durations in bonds, citing the possibility that inflation shocks driven by tariffs could weaken U.S. consumer purchasing power and further erode the labor market — developments that might prompt a more aggressive Federal Reserve response.
Emerging Markets: A Parallel Opportunity
Beyond Europe, J.P. Morgan also sees upside in emerging markets. Analysts recommend overweighting EM equities relative to developed markets, citing improving trade dynamics with China, stronger local currencies, supportive monetary policy, and increased policy stimulus.
They note that emerging markets look cheap and under-owned, especially in Chinese tech, which they view as well-positioned for recovery.
Additionally, they highlight the UK for its low valuations, high dividend yields, and defensive profile — factors that could offer stability during bouts of global volatility.
- Check out our free forex signals
- Follow the top economic events on FX Leaders economic calendar
- Trade better, discover more Forex Trading Strategies
- Open a FREE Trading Account
