‘No doubt’ U.S. economy is slowing, Invesco says, tipping Europe to outperform
Invesco's Ben Gutteridge sees a mid-cycle slowdown in the U.S., with Europe poised to outperform in 2026.
TL;DR
- The U.S. economy is losing momentum, but Invesco views this as a mid-cycle slowdown, not necessarily a recession.
- Invesco is optimistic about U.S. equities in the near term, expecting them to move higher into year-end.
- European equities are expected to outperform U.S. equities by 2026.
- Factors supporting European outperformance include a potentially weaker dollar, ECB rate cuts, increased bank lending, stimulus programs, and better valuations.
- Risks for the U.S. include potential inflation and debt sustainability issues from stimulus measures.
- Europe's auto sector faces pressure, particularly in adapting to electric vehicles and competition from China.