Europe/Germany back in the game

Research evidence excerpt

Europe/Germany back in the game

Equity Research

Equity Strategy

3 July 2026

Equity Market Review

Tech and Fed jitters have hit momentum trades. As

positioning is in the driver's seat, Q2 earnings will be key to

re-anchor price action to fundamentals. For now, renewed European Equity Strategy

appetite for diversification is benefiting Europe, with lower oil Emmanuel+44 (0)20 3134Cau,0475CFA

emmanuel.cau@barclays.comprices and pro-growth reforms in Germany reviving optimism.

Barclays, UK

Magesh Kumar Chandrasekaran, CFA

+44 (0)20 3134 5983

magesh.kumarchandrasekaran@barclays.comWeekly market commentary

Tech and Fed jitters hit momentum trades. Equity  Equity Market Review

market performance remains heavily influenced by the Emmanuel Makonga

Our weekly pack contains key +44 (0)20 7773 2593

path of Fed policy and a narrow group of mega-cap charts on performance valuation emmanuel.makonga@barclays.com

semiconductor stocks. The first FOMC meeting under and technicals Barclays, UK

Warsh helped alleviate concerns around Fed

independence, with his emphasis on price stability Arihanth Bohra Jain

+91 (0)22 6175 1406reinforcing policy credibility. At the same time, resilient US growth has driven a hawkish

arihanth.bohrajain@barclays.com

repricing in rates, with real yields and the dollar moving materially higher as debasement Barclays, UK

concerns faded. This has created some turbulence in equities, particularly among the most

crowded YTD winners and momentum driven semiconductor names. Ultimately, some froth has

come out of the market in recent weeks, with hedge funds and CTAs modestly de-risking,

although overall equity positioning remains elevated and polarized. (See US dominates,

broadening holds, 1 Jul). The good news is lower oil prices are helping ease inflation pressures,