Is now the time to buy European equities?

JPMorgan turned constructive on European equities, arguing that the region is attractive because earnings are improving after three weak years, valuations remain cheaper than U.S. peers, and shareholder returns are higher. The note says Eurozone PMI, credit growth, and earnings revisions are trending higher, while inflation expectations appear contained enough to allow smaller ECB hikes than the market may be pricing in. JPMorgan also sees a supportive regulatory backdrop for M&A and a likely pickup in shareholder activism, especially in Industrials, Consumer Discretionary, and Tech. European markets have outperformed the U.S. this year in local-currency total return terms, and the bank expects rotation and broader participation beyond AI-led trades in the second half. Overall, the article frames the Euro Stoxx 50 and European equities as a relative value opportunity with improving macro and corporate catalysts.