7 in 10 Natixis IM markets experts anticipate Europe’s outperformance compared to the United States in 2025.
- More than half of them (56%) estimates that pricing policies create the conditions for restarting European growth.
- Defense values (47%) are considered to be the most promising, in a context that has become favorable to European actions.
Following the announcement by American president Donald Trump of a pricing policy called “Liberation Day”, a clear change in perception is emerging in favor of Europe. 71% of market experts interviewed within Natixis Investment Managers (Natixis IM) and its affiliated management companies now consider that Europe will outperform the United States in 2025.
As every year, the Center for Investor Insight of Natixis IM questions around thirty of its market experts, strategists, portfolio managers, analysts and economists, from Natixis IM and its affiliated management companies. In 2025, the conclusions reflected a clear renewed confidence in Europe. Indeed, more than a third of them (38%) anticipate that it will be the most efficient market in the second half of 2025, against only 3% the previous year.
Market conditions that lean in favor of Europe
Although nearly 9 out of 10 respondents (88%) consider that pricing tensions will continue, 56% judge that these policies create a favorable land to the economic rebound of the old continent. Asked about the end of year theme they deem most likely, 74% of experts opt for “markets outside the United States outperforming”, against 26% which predict American outperformance. In addition, three quarters (74%) anticipate a strengthening of the euro by the end of 2025.
The persistence of geopolitical tensions and commercial uncertainties encourages Europe to strengthen its investments, especially in defense and infrastructure. This movement supports sectors such as defense banks and values. Almost 6 market experts out of 10 (59%) believe that defense values will benefit from the increase in world military spending, a particularly pronounced feeling in Europe (77%) compared to the United States (48%).
Volatility and inflation continue to fuel uncertainty
Despite this European optimism, experts remain vigilant in front of several threats to the markets in the next six months. The main opposite winds mentioned are: geopolitics (53%), employment (59%), household consumption (79%) and the risk of trade war (65%). In comparison, only two catalysts stand out: central banks policies (62%) and business results (47%).
On the macroeconomic level, experts attach more importance to political dynamics than to economic policies. The main risk quoted is the turmoil on the American bond markets, deemed worrying (average or high level) by 85% of respondents. Two-thirds of European experts (62%) also believe that US treasury bills are no longer a reliable refuge value, compared to only 24% in the United States.
Inflation remains the second major concern: 79% of respondents classify it among the major risks. However, 76% consider that the inflationary effects of customs duties will be transient, compared to 24% which fear a lasting recovery of inflation.
Volatility on markets is a source of opportunities
Persistent volatility remains a subject of concern. 71% of experts provide for that it will remain high on the equity markets, and 68% think the same for bond markets. Despite this, 71% of the experts interviewed say they actively find opportunities in the volatility of shares, and 74% in that of bonds. Others, however, choose to stay back: 29% on shares and 26% on bonds.
For the next six months, the defense values lead the perceived opportunities, cited by 47% of respondents. In the United States, the technological sector remains privileged, 35% anticipating a revival of dynamism in the second half.
Active management continues to provide value in the bond universe
Experts are focusing more and more on the bonds for the second half of 2025. 44% consider them a lever for return and income, but 68% insist on the key role in active management in the creation of value.
In the American market, Investment Grade obligations arouse more interest among Europeans (54%) than in their American counterparts (24%), which also reflects a more marked anticipation of credit defects with American respondents (48%), against 15%for Europeans.
In Europe, Core State Debt (29%) and Investment Grade credit (29%) dominate the choices. There is also a clear preference in Europe for short matures (69%, compared to 57% in the United States), while American investors turn more to long European matures. The main risks perceived of a trade war for the second half concern long sovereign bonds (41%) and high -efficiency or floating rate obligations in Europe (35%).
“Cash is King?” Not always!
In the past few years, the increase in interest rates has recently prompted many investors to fall back towards liquidity, perceived as safer than shares or obligations. But the experts of Natixis IM warn: liquidity does not always hold its promises, especially in a context of pressure on the US dollar.
For 41% of experts interviewed, the main threat linked to liquidity detention is the depreciation of the currency. For 38%, return opportunities are more attractive elsewhere. Finally, 35% believe that liquidity remuneration rates do not allow long -term objectives to be achieved.
The impact of artificial intelligence will not only be positive
While artificial intelligence (AI) transforms our daily lives, its effects on finance by horizon 2 to 5 years question the experts. The profits are multiple: 88% believe that it will open new opportunities, 79% that it will make it possible to detect invisible risks until then, and 79% that it will accelerate day trading. But the fears remain: 94% fear an increase in fraud, 71% believe that investments in AI will take time before paying off and 21% fear that it threatens their own job.
AI could also help improve ESG transparency, a potential highlighted by 44% of respondents. More broadly, 41% provide for a prosecution of the development of impact investment, and 56% believe that the real leaders of sustainable investment will impose themselves in the years to come.
The full survey report is available ici.
