General equity market in Europe appears lacklustre

AFTER rounds and rounds of unconventional monetary policy from the European Central Bank (ECB) such as negative interest rate policy and quantitative easing (QE), the general equity market in Europe appears lacklustre in comparison to the US counterparts.

We will be using the Euro Stoxx 50 Index as the proxy for the European equity market. Euro Stoxx 50 Index is the leading blue-chip index for the eurozone covering 50 stocks from 12 eurozone countries. The performance of the Euro Stoxx 50 Index lags behind the S&P 500 Index by a huge margin considering the multiple new record highs the S&P 500 Index has been breaking since 2017. On the other hand, the Euro Stoxx 50 Index has yet to even take out of the global financial crisis high of 4,572 points.

One of the economic indicators that correlate positively with Euro Stoxx 50 Index is the eurozone economic sentiment. It is derived from the European Commission's Business and Consumer Surveys.