European Stocks Closes 2022 on Bearish Sentiment Fueled by Macroeconomic Factors


European stocks have experienced further headwinds in recent months after the Kremlin imposed an indefinite oil cut on eurozone countries.

European stocks will close out 2022 on a bearish sentiment as global markets prepare to close trading later today. Driven by the ongoing war between Russia and Ukraine, record inflation and monetary policy tightening, the euro economic area will experience further headwinds from 2023 onwards. In addition, the euro derivative against the US dollar has been on the rise. below the ratio of 1 for the first time since the 2008 financial crisis in 2022.

However, European stocks are not exempt from the global selling pressure that has continued into 2022. Additionally, US big tech and cryptocurrency companies have been trending lower over the past twelve months.

In particular, the continuous contract for the STOXX Europe 600 Index is down approximately 12 percent over the past twelve months. During the mid-London trading session, the FTSE 100 traded at 7,497.01, down roughly 0.21 percent.

However, the underperformance of stocks has coincided with rising food, oil and gasoline prices driven by the Russia-Ukraine war and subsequent sanctions.

As such, market strategists expect developed economies to struggle to post growth over the next decade.

“I think we are probably going to move into a decade of very, very poor growth where developed economies will be lucky with 1% growth per year if they can pull it off…” Daniel Lacalle, author and chief economist at Tressis Gestión.

A Closer Look at European Stocks in 2022

European stocks have experienced further headwinds in recent months after the Kremlin imposed an indefinite oil cut on eurozone countries. The European standoff is expected to continue long after the White House recently announced $1.85 billion in military assistance for Ukraine, including the transfer of the Patriot Air Defense System.

As the war escalates, market strategists worry that it could escalate into World War III.

The situation has not improved at all after Covid restrictions significantly disrupted global supply. Since the sanctions affect individual companies, analysts forecast that next year’s growth will be determined by fundamental factors.

“I think next year it won’t be the Fed that determines the market, I think it will be the companies, the fundamentals, the companies that can grow earnings, defend their margins, probably go higher,” Patrick Armstrong, chief investment officer at Plurimi Wealth . LLP, saying CNBC’s “Squawk Box Europe” on Friday.

The UK Brexit remains a choppy move for most companies in relation to managing their supply chain. In addition, the obligations previously established by the European Parliament for member states have changed significantly.

In particular, the European Union is preparing to launch your digital euro to boost your struggling economy.

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