Post-pandemic Investment Opportunities In Europe
After many false starts, Europe is finally emerging from an incredibly difficult 18 months of battling Covid-19. As measured by data compiled by worldometers.info, 19 of the 25 nations with the highest Covid-19 death rates per million in the world were European. This is a startling statistic and brings into sharp focus the continent-wide personal and economic impact of the pandemic. To put it in context, the United States is 20th on that list.
The STOXX 600, a broad measure of stock performance encompassing companies listed on all the major exchanges in Europe, was up 27.58% over the last 12 months as measured by FactSet on June 23. In comparison, the S&P 500 was up approximately 39.9% for the same period. At C.J. Lawrence, we believe this lag in STOXX 600 price performance correlates with the slower rollout of vaccines in Europe and the slower emergence from lockdowns and economic restrictions.
The S&P 500 had recovered from its selloff due to the Covid-19 impact by late August 2020. In comparison, the STOXX 600 bottomed again in late October 2020 as a new wave of Covid-19 infections and shutdowns swept Europe and only sustained a close above its pre-pandemic high in April 2021. From our perspective, the STOXX 600 has been lagging the U.S. stock market recovery by about six to eight months and we believe this represents a potential investing opportunity.