The considerable upside in European equities

The euro-zone equity market index has considerable upside potential if the equity risk premium in the zone returns to normal. Such a return to normal would require: Equity investors accepting the idea that long-term interest rates may remain very low for a long time; Objective risk factors (trade war, fear of recession, geopolitical tensions) correcting in the right direction . So we believe that the probability of a scenario of a sharp rise in European equities is far from zero.