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The Market Ear

May 27, 2026

Embattled Europe

Macro ThematicEquitiesFXRates Govt BondsIndustrialsConsumer Discretionary

Despite structural headwinds and deep skepticism, European equities are hovering near highs as macro indicators show early signs of 'less bad' stabilization.

Key Takeaways

  • 1.European equity sentiment is extremely bearish with 6 straight weeks of outflows, yet indices remain near All-Time Highs.
  • 2.Macro stabilization is beginning to appear in forward-looking indicators, particularly in German investment spending and Spanish growth.
  • 3.Valuations in European Defense and Luxury sectors have compressed to attractive levels, with Defense showing 20%+ potential upside.

Table of Contents

  • Embattled Europe
  • Outflow streak
  • Record-setting (bad)
  • German investment spending
  • Struggling sector #1
  • Struggling sector #2
  • EUR positioning
  • Meloni magic
  • Spanish resiliency
  • European balance sheets remain robust
  • Crazy stat

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Securities

GSSB/DEFEEuro FuturesItalian StocksSpace-X

Themes

Macro-to-Market DisconnectValuation Re-rating

Regions

EuropeGermanyItalySpain

Browse More

The Market EarMacro ThematicGSSB/DEFEEquitiesFX

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