The Outlook for European Stocks in 2026

In this episode of "Thoughts on the Market," Paul Walsh and Marina Zavolock discuss the outlook for the European stock market in 2026. Marina reviews 2025 as a year of two halves, with a strong first half driven by factors like German fiscal policy and diversification from U.S. equities, followed by a weaker second half due to slower execution and weak earnings growth. Looking ahead, they discuss the potential for Europe to benefit from the U.S. economic recovery, key themes such as China competition and German fiscal policy, and sector preferences based on their quantamental model, highlighting banks, defense, and utilities. They also touch on the potential impact of AI adoption on European equities.