Executive Summary
Morgan Stanley's European equity strategist Marina Zavolock presents a 'slipstream' thesis for 2026: European markets will benefit from US strength despite weak fundamentals. The core insight is structural - Europe trades at a 26% discount to the US on a sector-neutral basis, creating an arbitrage opportunity when global risk appetite improves. However, this is a multiple expansion story, not an earnings story. Zavolock expects European earnings to grow just 3.6% versus consensus of 12.7%, drive...
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