The Europe Comeback Trade Is Falling Apart

The 'Europe comeback' trade is stalling as equities remain range-bound, industrials face heavy selling, and volatility remains stubbornly high compared to the US.

Key Takeaways

• 1.European equities remain range-bound and lack a clear medium-term trend, behaving more as a mean-reversion market.
• 2.Industrials are being aggressively sold by institutional investors, with the long/short ratio hitting its lowest level since January 2024.
• 3.European equity volatility remains stressed relative to the VIX, indicating a market lack of confidence in the 'reflation' or 'comeback' narrative.

Table of Contents

• Soggy Europe
• Stuck Stoxx
• Dead
• Dead cross
• Achtung
• EU banks
• Industrials
• Selling European core
• The more stressed one
• Vol knows

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