European markets regain favor: Economic resilience exceeds expectations, limited AI exposure, and clear monetary policy

(1) The STOXX Europe 600 Index is approaching a historic high, the euro exchange rate is at a three-month peak, forming a sharp contrast with March; for the week ending August 12, European stock markets saw inflows of $2.44 billion, the largest single-week inflow since the week before the US-Iran war (February 25). (2) The main reasons European markets are favored include: the European economy was less affected by the Iran war than expected, monetary policy outlook is clearer than in the US or Japan, and limited AI exposure has helped them avoid the high volatility of global technology stocks. (3) According to Morgan Stanley's chief European equity strategist, the current inflation environment has not triggered recession concerns, but has instead benefited stock markets, which underpins the steady rise of European equities (especially banking stocks).