European Markets Predicted to Outperform
JPMorgan Chase and Citi, two major banking giants, are betting against the S&P 500. They predict the Stoxx Europe 600 Index (SXXP), which tracks 600 of Europe’s largest companies, will outperform the US benchmark index for the rest of 2025. Their forecast is based on a brighter economic outlook for the European Union.
JPMorgan is particularly bullish on the SXXP, forecasting it to reach 580 points. They’re even predicting a dip in the S&P 500. Citi is a bit more conservative, targeting 570 points for the SXXP, pointing to clearer corporate earnings as a driver of growth. Citi strategist Beata Manthey suggests that reduced uncertainty around earnings could boost the market, particularly in sectors that have been underperforming. Currently, the SXXP sits at 545 points, already up 7.6% this year.
EY Sounds a Warning Bell for US Stocks
Meanwhile, accounting firm Ernst & Young (EY) is issuing a cautionary note. They believe the current S&P 500 rally is overly optimistic, ignoring the potential negative impact of tariffs. EY chief economist Gregory Daco warns that tariffs will likely increase prices and hurt consumer spending. He predicts the US economy will slow significantly in the final quarter of 2025, growing at only 0.6% year-over-year. He summarizes the situation by saying that the market’s optimism is unwarranted given the persistent economic drag from tariffs. The S&P 500 currently stands at 5,802 points.
Disclaimer: This information is for general knowledge only and does not constitute investment advice. Always do your own research before making any investment decisions.
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