European stocks will rise next year as household spending power picks up and the threat of a sharp slowdown eases, according to Goldman Sachs Group Inc. strategists.
Quicker-than-expected cooling in euro area inflation should lead to positive growth in real wages — a boost for consumers, while also reducing obstacles to interest-rate cuts and with that the risk of a deep recession, the team led by Sharon Bell wrote in a note.
“We expect European equities to continue to perform in 2024,” the strategists said. “This is predicated on an improved economic backdrop, reasonable valuation and a roughly flat outlook for long-term bond yields.”
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