Outlook on Europe in 2023
Lazard's Outlook series provides a forward-looking view, over the short, medium, and/or long term, of asset classes, sectors, regions, or countries from the view of Lazard Asset Management. In this edition, LAM portfolio managers share their outlook for Europe in 2023.
- The stock market revival of recent months seems premature, given the full effects of 2022’s aggressive hikes in interest rates have yet to be fully felt.
- We believe forecasts of a shallow recession in the US and Europe are overly optimistic.
- However, the headwinds facing European economies and companies are arguably more priced into stock market valuations than in other developed equity markets, while Europe is likely to exit recession first.
- Easing inflation led to a rebound in European fixed income markets in Q4 2022, ensuring a tough year for investors ended on a brighter note.
- The repricing of European bonds in 2022 means yields are potentially providing attractive entry points—2023 could be an interesting year for the asset class.
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