Weighing on Europe’s corporate earnings, the stronger local currency has cut into many multinational companies’ profits generated from exports – Stoxx Europe 600 companies generate about half of their revenues outside of Europe.

“The resurgence of the euro has been quite negative for the competitiveness of the global companies listed there,” Paul Markham, global equities portfolio manager at Newton Investment Management, told the WSJ.

However, some anticipate European equities to catch up in the quarters ahead, especially with the a weakening EUR. Additionally, U.S. earnings growth is anticipated to to slow down in 2019 and in 2020 as the impact of tax cuts fades.

“There are signs Europe is in the best position it’s been in in recent years to turn that tide,” David Holohan, equity investment strategist at Mediolanum Asset Management, told the WSJ, pointing to rising input costs in the U.S. that could pressure margins.

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