JPMorgan Says European Stocks Cheap After Oil Slump
JPMorgan says European equities are attractively valued after the oil price slump, as easing Middle East tensions may boost investor appetite for the region.
JPMorgan Asset Management says European stocks have become attractively cheap following the recent slump in oil prices, as easing geopolitical risks in the Middle East could draw investors back to the region.
Karen Ward, chief market strategist for EMEA at JPMorgan Asset Management, told Bloomberg that assuming the Middle East crisis has peaked and oil prices decline, investors are likely to return to their pre-war positioning. The oil price drop, driven by expectations that the Hormuz Strait disruption is over, has reduced inflationary pressures and improved the outlook for European equities. For fuel traders, lower crude prices typically translate into narrower crack spreads, as refining margins compress when input costs fall. However, the broader market shift also signals a rotation away from energy stocks toward other sectors, which may affect demand for oil futures and related instruments. Check NowPrice's fuel page for current pricing on crude and refined products.
Looking ahead, investors will watch for further signals on Middle East stability, as any renewed tensions could reverse the oil price decline. Key data releases include weekly US crude inventories and OPEC+ production figures, which will provide clues on supply dynamics. The European Central Bank's policy stance also remains a factor, as lower energy costs could give room for rate cuts, further supporting equities.