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Eurozone Beats United States Again: 5 Hot Stock Picks

If the U.S. economy is on a steady growth path, developments across the pond are brisker. The European Union economy expanded at its quickest clip (2.5%) in a decade in 2017, as per figures from the EU statistics office Eurostat. It was the region’s strongest performance since 2007, when it grew 2.7%.

In the fourth quarter of 2017, both the EU and the 19-nation eurozone expanded 0.6% sequentially. Overall in 2017, the Eurozone grew 2.5% (the quickest growth rate since a 3.0% jump in 2007) while the U.S. economy grew 2.3%. In 2016, Eurozone growth had surpassed the United States for the first time since the 2008 crash, when the former grew 1.7% against 1.6% expansion seen in the latter.

Among Eurozone's notable economies, GDP growth in the fourth quarter slackened slightly in Germany (0.6% versus 0.7% in Q3), Italy (0.3% versus 0.4%) and Spain (0.7% versus 0.8%), but picked up in France (0.6% versus 0.5%), the Netherlands (0.8% versus 0.4%), Finland (1.1% versus 0.5%), Belgium (0.5% versus 0.2%) and Portugal (0.7% versus 0.5%).

What's Behind the Uptrend & What Lies Ahead?

A supportive ECB and a more pro-growth political backdrop in some of its core economies should be thanked for such revival, as per KPMG chief economist. European exporters are enjoying a tailwind thanks to an uptick in global growth.

As per the chief economist Europe at Standard Chartered “rising wages, low inflation and record-level employment are driving consumer spending; meanwhile, investment is rising, helped by strong corporate profitability and buoyant confidence.” Standard Chartered sees Eurozone growth of 2.2% in 2018 and 2% in 2019.

The European Commission upgraded the 19-country single currency bloc's economic growth outlook lately. It now expects Eurozone to grow 2.3% this year, up from a prior forecast of 2.1% made in November. The wining momentum should continue ahead with the Eurozone economy expected to expand 2.0% in 2019, instead of the earlier-projected 1.9% growth. Asset manager Vanguard bets big on Europe and expects the region to perform better than the United States in the long run.

5 Hot Euro Zone Stock Picks

Against this backdrop, let's look at some European stocks that are likely to outperform.

Talend S.A. TLND: It is a provider of big data and cloud integration solutions, carrying a Zacks Rank #2 (Buy).

Novo Nordisk A/S NVO: This Zacks Rank #2 company is a global leader in insulin and diabetes care and makes and markets a variety of other pharmaceutical products.

ASML Holding N.V. ASML: This Zacks Rank #2 company is in the manufacture of advanced technology systems for the semiconductor industry.

Cimpress N.V CMPR: This is a Zacks Rank #1 (Strong Buy) online supplier of graphic design and customized, printed products to businesses and consumers. You can see the complete list of today’s Zacks #1 Rank stocks here.

ING Groep N.V. ING: This Zacks Rank #2 company is a global financial institution of Dutch origin offering banking, insurance and asset management to over 50 million private, corporate and institutional clients globally.

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Talend S.A. (TLND): Free Stock Analysis Report
Novo Nordisk A/S (NVO): Free Stock Analysis Report
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