Investors will not soon forget the tense moments that the European debt crisis delivered over the past three years, but markets last year reflected an improved investment outlook across Europe.
Even though its nascent economic recovery is early and still gaining momentum, Europe is looking largely beyond its borders and preparing to exploit its internal cross-country connections to drive prosperity. Throughout the past six months, we have identified opportunities to add individual European equity markets, and this week's report adds one more new market to our list of favorite countries.
That being said, Europe's developing recovery is still weak and uneven. Consumer spending has been cautious, and bank lending is still flat or declining in many countries. Even the more relaxed austerity conditions still weigh on the economy. The euro zone is likely to post a fragile 1.1 percent growth rate in 2014, although global investors have already pushed equity prices higher as the economy has recovered.
Our Wells Fargo travel team visited Europe in September of 2013, to investigate the potential durability of the economic recovery and to look for new opportunities. What surprised us on our trip was that company executives, economists, and financial analysts are focused less on a European economic recovery and more on strengthening global economic activity. The business leaders we interviewed are weighing Europe's modest progress against global conditions and deciding, on balance, to raise their expectations for business and earnings from around the world.
For example, the Swedes we met are glad they did not join the euro zone but appreciate being part of the larger European Union. We saw much the same result in Eastern Europe, especially in Poland, which has become a key manufacturing and assembly point for German and other Western European firms.
Poland is one of the main developing countries in Europe, and the well-educated Polish workforce contributes significantly to the European supply chain, which produces goods headed all around the world. The economic recovery in Europe is not as strong as those in Great Britain and the United States, but European exports to both countries are pulling the euro zone's prospects higher.
Read more: Taking Europe's Pulse - Barrons.com
Even though its nascent economic recovery is early and still gaining momentum, Europe is looking largely beyond its borders and preparing to exploit its internal cross-country connections to drive prosperity. Throughout the past six months, we have identified opportunities to add individual European equity markets, and this week's report adds one more new market to our list of favorite countries.
That being said, Europe's developing recovery is still weak and uneven. Consumer spending has been cautious, and bank lending is still flat or declining in many countries. Even the more relaxed austerity conditions still weigh on the economy. The euro zone is likely to post a fragile 1.1 percent growth rate in 2014, although global investors have already pushed equity prices higher as the economy has recovered.
Our Wells Fargo travel team visited Europe in September of 2013, to investigate the potential durability of the economic recovery and to look for new opportunities. What surprised us on our trip was that company executives, economists, and financial analysts are focused less on a European economic recovery and more on strengthening global economic activity. The business leaders we interviewed are weighing Europe's modest progress against global conditions and deciding, on balance, to raise their expectations for business and earnings from around the world.
For example, the Swedes we met are glad they did not join the euro zone but appreciate being part of the larger European Union. We saw much the same result in Eastern Europe, especially in Poland, which has become a key manufacturing and assembly point for German and other Western European firms.
Poland is one of the main developing countries in Europe, and the well-educated Polish workforce contributes significantly to the European supply chain, which produces goods headed all around the world. The economic recovery in Europe is not as strong as those in Great Britain and the United States, but European exports to both countries are pulling the euro zone's prospects higher.
Read more: Taking Europe's Pulse - Barrons.com
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