Today on the show, we talk to Matt Siddle, portofilo manager and co-manager of the Fidelity Europe Fund. Matt discusses the recent activity in European markets and where he is seeing investing opportunities in this second quarter. Matt says even though the US market tends to look stronger than the European market, he argues Europe is more attractive on a valuation basis. He says by looking at PE as a measure, Europe has more value options with half of the market below 15 times earnings.  US may have better growth stocks but Europe, from a broader perspective, is a better value proposition. Matt also looks ahead to June and discusses what a rate cut would look like if the ECB decides to cut. He says if this is a mid-cycle rotation and rates can come down without economic damage, this would be positive for markets. But if rate cuts are induced in response to a weakening market, which is not the current market sentiment, owning deep cyclicals would not be a good investment.  Matt suggests early cyclicals, consumer and defensive stocks would be the better investment. Matt also compares the banking story across many European countries and touches on China and India’s export story and its impact on Europe.

Recorded on May 3, 2024.

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