Morgan Stanley: Comeback for Europe’s Bull Market? | 30 Jun 2026 | Thoughts on the Market
1. Executive Briefing (TL;DR)
- The Core Thesis: European equities are staging a structural comeback, matching the S&P 500's year-to-date performance. This shift is driven by a combination of hidden artificial intelligence capex exposure, an influx of global diversification capital fleeing high AI volatility in the US, and structural re-ratings away from decade-long valuation discounts.
- Top Key Takeaways:
- European equity markets are heavily detached from weak domestic GDP growth, with global revenue exposure now sitting at historical highs
[[00:04:49](https://youtu.be/fuS5eeCebUI?si=ne2kxD8dRUBZf1LU&t=4m49s)]. - A small pocket of specific European sectors (Semis, Tech Hardware, Capital Goods, and Metals/Mining) represents ~15% of the index weight but has driven nearly 90% of Europe’s year-to-date performance due to the AI capex boom
[[00:01:13](https://youtu.be/fuS5eeCebUI?si=ne2kxD8dRUBZf1LU&t=1m13s)].
- European equity markets are heavily detached from weak domestic GDP growth, with global revenue exposure now sitting at historical highs
References
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