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European equities: Why interest rate cuts won't help investors

The prospect of rate cuts won't be enough to support the market's current rating, analysts say
December 14, 2023
  • Ratings agency S&P forecasts soft landing for eurozone
  • Companies looking to protect margins are starting to cut jobs

The 13 per cent year-to-date gain made by Europe’s Stoxx 600 may not be as substantial as that made by the S&P 500, but it’s still a pretty decent return when judged against the moribund state of the eurozone’s economies, with gross domestic product (GDP) pretty much flat during the first three quarters of this year.

With economic growth set to remain anaemic, though, earnings are likely to come under pressure before long, leaving analysts bearish on the prospects for European equities next year.

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