Analysts at Morgan Stanley have tipped Europe as the best-performing region in the world in the second half of the year and chose stocks to trade the upswing.
"We think there is a good chance that Europe outperforms all major regions this year for the first time in a calendar year since 2000," its analysts said in a research note published Sunday.
Morgan Stanley expects global markets including the U.S. to be "choppier" throughout the summer due to rising inflation, pressure on firms' margins and a possible slowing of quantitative easing put in place to boost the economy. It said there is a "compelling" case for Europe to outperform because of more attractive valuations, stronger earnings-per-share growth and the launch of the E.U. massive post-Covid recovery fund.
It picked more than two dozen European stocks that have a large international presence, but trade at a discount to their global peers.
Morgan Stanley's picks include: