LIVE MARKETS-European stocks: long-term bulls, short-term caution

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EUROPEAN STOCKS: LONG-TERM BULLS, SHORT-TERM CAUTION

European fund managers are turning more cautious on the near-term outlook for the region's stocks, Bank of America's August survey shows, amid rising concerns that U.S. policy and a weakening American consumer could drag on global growth.

A net 15% expect market gains in the coming months, down sharply from 37% in July. Half of the respondents say the tariff shock remains underpriced, up from 44% last month.

Still, the 12-month outlook is robust. BofA says 88% of respondents see upside for European stocks into 2026, up from 81% in July, with no one expecting downside.

Yet the rotation into EU equities is losing momentum, with only a net 25% overweight relative to benchmarks, down from a peak of 41% last month, according to the Wall Street bank.

In detail, Germany remains the most favoured market, while Switzerland lags. Financials are the top consensus overweight; autos and retail are the leading underweights, it says.

(Danilo Masoni)

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