When you have something that's hated by everyone, it only takes a small catalyst to turn it. Europe has been beaten down and cheap forever but it got excessively cheap coming into 2023 on worries about energy security and the global economy.
The tide turned on better weather forecasts in December and that turned into an incredibly-mild winter. At the same time, the worries about a global recession have faded and China has reopened, boosting European exports. It's all turned into something of a perfect storm for European stocks.
On Friday, the great start to the year looked like it might have hit a stumbling block after a hot US inflation report triggered fears about higher rates. However today the Stoxx 600 has completely recovered Friday's drop in an impressive show of strength.
Can it continue? European stocks are still hated so I can certainly see the case for it but chasing something that's underperformed forever is a risky strategy.
