European volatility

After a volatile 2000 for European equity markets, the outlook for the next 12 months appears somewhat brighter. This view is based on a number of considerations and perhaps the most important of these is that, relative to the US, Europe has witnessed only a moderate slowdown in activity and earnings growth, reflecting stable economic growth and continuing restructuring. We believe interest rates in Europe have peaked and are likely to decline during the course of the year, providing support to equity markets, while further cuts in US rates should strengthen investor confidence. A more fa...