According to the latest Bank of America (BofA) survey, investor sentiment toward Europe's economy has improved significantly. Market participants have grown more optimistic about the region's prospects due to easing trade tensions and anticipated government stimulus measures.
The survey provides specific evidence of this growing confidence. Nearly 80% of respondents believe German government subsidies could act as a catalyst for economic growth. Meanwhile, the proportion of investors expecting improved business activity in the region has risen to 29%.
This optimism is translating into investment decisions. A net 34% of market participants are increasing their allocations to European equities, the highest level in four years. Moreover, three-quarters of respondents forecast positive performance for European indices in the coming year.
However, concerns about global GDP growth persist. Most survey participants acknowledge that Europe's export-dependent economy is vulnerable to external shocks.