JPM | FTM | Today’s Research | Europe

Research evidence excerpt

JPM | FTM | Today’s Research | Europe

Europe Equity Research

Europe First to Market 08 June 2026

Today’s Morning Meeting | Also Published Today | Key Changes | JPM Events | Upcoming Earnings

Today’s Morning Meeting

Equity Strategy (Mislav Matejka, CFA)

What would it take for Europe to trade relatively better?

At the overall equity level, we continue to recommend using the dips caused by adverse geopolitical news to add into, but have

also advised two weeks ago to start looking at Low Vol part of the market. We think that this group of stocks is likely to find

support irrespective of where bond yields go from here, i.e., even if they move up. Further into the 2nd half, the wildcards for

more market gains are the prospect of a dovish turn by the Fed, something which is right now clearly very much out of

consensus, materially lower oil prices by this time next year, and potential green shoots in China. European indices, both SX5E

and SXXP, have rebounded nicely from the Iran conflict-driven lows, to currently trade near the highs of the year. The question

is what would be needed for these to make a clear breakout in 2H? Relatively, the Iran conflict has likely hurt European

prospects more than other regions, and our call in March to go back to Mag-7 is clearly at the disadvantage of Europe. Near

term, Iran conflict retains potential to escalate, even as we believe both sides have an incentive to come to terms eventually.

Eurozone has lagged since the conflict began, and this might not change imminently. Having said that, as we move through 2H,

we think Europe is set to break out to fresh highs, and believe that the region could even show spells of outperformance,

especially if Mag-7 shows more sustained rollovers, and once Iran conflict risks subside.