The stock market after-party is in Europe | CNN Business (2024)

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US stock indices remain in record territory. But in recent weeks, they’ve been stuck in a holding pattern as investors hunt for the next big catalyst that could send shares higher.

In Europe, there’s no such hesitance.

What’s happening: The STOXX 600 index hit an all-time high on Monday and is pushing higher again on Tuesday. Strategists think that after a decade of skepticism, European shares could continue to be solid bets in the months to come.

“This is not 4 a.m. [at] the European party,” Jeffrey Sacks, head of investment strategy in Europe, the Middle East and Africa at Citi Private Bank, told me. “This is 9 p.m., so there’s a lot further to go.”

For the past 10 years, investors have been wary about pumping money into Europe, which has been beset by low economic growth, a weak euro, political risk and a struggling banking sector, Sacks said.

Now, he sees a different dynamic starting to play out, as EU member states start to spend money allocated through the bloc’s recovery fund and vaccination programs gather steam.

JPMorgan predicts that €390 billion ($475 billion) in grants and €360 billion ($438 billion) in loans will start to be rolled out this year and money could continue to feed through until 2026.

There are also structural reasons Europe appears poised for a breakout. The region has a high proportion of stocks like auto companies and banks that perform well when the economy is on the upswing. Many pay healthy dividends. The market relies less than the United States on shares of high-growth tech companies like Amazon and Apple (AAPL), which look less appealing when investors are concerned about interest rate hikes.

“We upgraded our tactical view on European equities to neutral in February, and are seeing more reasons to be optimistic about this asset class for the next six to 12 months,” BlackRock strategists told clients on Monday.

There are risks. Like the Federal Reserve, the European Central Bank — which meets Thursday — is vulnerable to a policy mistake that could hamper the economic rebound. Fears about Covid variants are also stymying the summer tourism season for the second year in a row.

But Sacks thinks that after many years of “disappointment,” this could be Europe’s time to shine, resulting in a US-style wave of mergers and acquisitions and even a retail trading frenzy.

Not just the European Union: The United Kingdom could also experience growth after investors stayed on the sidelines for years due to Brexit, while Asian shares stand to benefit as the trade environment improves.

Wall Street has long dominated markets. Over the past decade, the S&P 500 has rallied 236%, while Europe’s STOXX 600 rose roughly 86%, the FTSE 100 in London climbed about 27% and Hong Kong’s Hang Seng gained 56%. That means there’s lots of ground to make up.

Biogen’s Alzheimer’s drug is a Wall Street winner

Wall Street thinks Biogen’s new Alzheimer’s drug is poised to be a huge success.

On Monday, the US Food and Drug Administration approved the use of the experimental drug aducanumab for early-stage Alzheimer’s patients. It’s the first treatment for the disease to receive a green light from the regulator in nearly 20 years.

Shares of Biogen (BIIB), which developed the drug also known as Aduhelm with Japanese partner Eisai, surged 38% Monday.

The drug was developed for patients with mild cognitive impairment, not severe dementia. It’s intended to slow progression of Alzheimer’s disease, not just ease symptoms, and could be used to treat millions of people.

Massachusetts-based Biogen needs a new blockbuster medicine after generic versions of Tecfidera, its multiple sclerosis drug, arrived in the United States last year.

Biogen’s revenue dropped 25% last quarter compared to the previous year. Chief Financial Officer Michael McDonnell said this decline “was mostly driven by the continued impact of Tecfidera generics in the United States.”

Watch this space: Aduhelm, which received accelerated approval, will still be studied, and there is debate over its efficacy. An advisory committee concluded last year that there was not enough evidence to support the effectiveness of the treatment.

“FDA will continue to monitor Aduhelm as it reaches the market and ultimately the patient’s bedside,” Dr. Patrizia Cavazzoni, director of the FDA’s Center for Drug Evaluation and Research, said in Monday’s announcement.

There are also concerns around cost. Biogen announced on Monday that the wholesale cost of treatment with aducanumab, which requires an infusion once every four weeks, carries an annual cost around $56,000 for a high dose.

Jeff Bezos is going to space. Is that a risk to Amazon’s stock?

In the billionaire space race, Jeff Bezos is about to break new ground.

The latest: Bezos will fly to space on the first crewed flight of the New Shepard, the rocket ship made by his space company, Blue Origin. The flight is scheduled for July 20, just 15 days after he’s set to step down as CEO of Amazon (AMZN). He’ll be joined by his brother.

If all goes according to plan, Bezos — the world’s richest person, with a net worth of $187 billion — will be the first of the billionaire space tycoons to experience a ride aboard the rocket technology that he’s poured millions into developing, my CNN Business colleague Jackie Wattles reports.

Not even Elon Musk, whose SpaceX builds rockets powerful enough to enter orbit around Earth, has announced plans to travel to space aboard one of his company’s crew capsules. British billionaire Richard Branson has long said he would be among the first passengers aboard Virgin Galactic’s rocket-powered plane, but that flight is expected to take place later in 2021.

Investor insight: Bezos isn’t leaving Amazon entirely when his tenure as CEO ends, and will transition to the executive chairman role. Should investors be concerned, then, that the company’s founder and visionary is rocketing into space?

Up next

The US trade balance for April posts at 8:30 a.m. ET, followed by data on job openings at 10 a.m. ET.

Coming tomorrow: GameStop (GME) reports earnings as its stock continues to soar.

The stock market after-party is in Europe | CNN Business (2024)

FAQs

Can I trade in US stock market from Europe? ›

Foreigners can invest in U.S. stocks by opening a U.S.-based brokerage account. Be aware of tax documentation that may be required for an international brokerage account. Much of the information out there about taxes assumes you're a U.S. taxpayer.

How to trade in European stock market? ›

One method to trade European stocks is by buying and selling shares directly on the stock exchanges where the companies are listed. It provides investors with control over their investment decisions and the ability to capitalize on potential price movements.

Is the stock market a thing in other countries? ›

The largest stock exchange in the world is the New York Stock Exchange. Other large stock exchanges include the Nasdaq, the National Stock Exchange of India, the Hong Kong Stock Exchange, the Singapore Stock Exchange, and the Shanghai Stock Exchange.

What is driving the stock market? ›

Fundamental factors drive stock prices based on a company's earnings and profitability from producing and selling goods and services. Technical factors relate to a stock's price history in the market pertaining to chart patterns, momentum, and behavioral factors of traders and investors.

Can Americans invest in the European stock market? ›

A depository bank issues shares of foreign companies in international markets, typically in Europe, and makes them available to investors within and outside the U.S. Many GDRs are denominated in U.S. dollars, though some are denominated in euros or the British pound.

Can I day trade US stocks from another country? ›

The answer is generally yes, but there are some other things you need to know. The U.S. stock market is one of the foundations of the nation's economic system, and there is no citizenship requirement when it comes to allowing small investors to own shares in a U.S. company.

What stock exchange does Europe use? ›

Europe's biggest stock exchange is the Euronext which combines five markets based in Amsterdam, Brussels, Dublin, Lisbon, London, Oslo and Paris.

What are European options on US stocks? ›

What Is a European Option? A European option is a version of an options contract that limits execution to its expiration date. In other words, if the underlying security such as a stock has moved in price, an investor would not be able to exercise the option early and take delivery of or sell the shares.

Is there any country without stock market? ›

Countries without a stock exchange include Democratic Republic of the Congo. The Mongolian Stock Exchange as of 2006 was the world's smallest stock exchange by market capitalisation.

Which country owns the most stocks? ›

Countries with largest stock markets globally 2023

In 2024, stock markets in the United States accounted for roughly 60 percent of world stocks.

What is the 1 rule in stock market? ›

The 1% rule demands that traders never risk more than 1% of their total account value on a single trade. In a $10,000 account, that doesn't mean you can only invest $100. It means you shouldn't lose more than $100 on a single trade.

Should I pull my money out of the stock market? ›

Key Takeaways. While holding or moving to cash might feel good mentally and help avoid short-term stock market volatility, it is unlikely to be wise over the long term. Once you cash out a stock that's dropped in price, you move from a paper loss to an actual loss.

What is the stock market prediction for 2024? ›

Overall, Yardeni Research forecasts S&P 500 operating earnings at $250 in 2024, up 12% vs 2023. He puts them at $270 in 2025 (up 8%) and $300 in 2026 (up 11.1%). These figures compare with analysts' consensus forecasts of $244.70 in 2024, $279.70 in 2025 and $314.80 in 2026.

Can I trade US options from Europe? ›

Freedom Finance Europe (the official name of the company) provides seamless access to trading in more than 800.000 call and put options on US stocks. The commissions are fair, especially for those who choose the Euro account, and the app is so easy to use that even less experienced traders will feel comfortable.

Can I invest in US stocks from Germany? ›

U.S. stocks can be traded not only on the home exchanges in the U.S. but also on German stock exchanges. Investors in Germany need a broker and securities account for this purpose - as is usually the case for stock exchange trading.

Can you trade stocks out of the country? ›

Investors who want to trade international stocks in their local currencies can open a specialized global account, if offered by their brokers. Benefits: You have a much wider selection for trading individual stocks overseas versus hunting for their U.S. versions.

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