2016 The Best Investment In The World Is Not In China And India.

In 2015, the pain of the Greek debt crisis, the slowdown in China's economy and the sharp fall in commodity prices made Europe's stock market lose its color, but the European stock market in 2015 still outperformed the US stock market and emerging market stock market.

Analysts said the trend will continue in 2016.

In our commentary, Deutsche Bank's strategist wrote: "we believe that in the 2016, with stronger earnings growth, more valuing and foreign exchange support, the European stock market has the ability to surpass the US stock market in the future."

The strategist said: "

There has been an economic recovery. We have not yet reassessed the economic recovery in Europe (banks, building materials and personnel agencies), and the further strengthening of the US dollar will bring benefits to European specific industries (technology, pharmaceuticals and aviation).

It is the European economic recovery and the strength of the strong US dollar that made us optimistic about the European stock market in 2016.

The stock of these industries has not yet fully reflected the economic improvement in Europe. "

As 2015 is about to end, let's take a look at five things you need to know about the European stock market in 2016.

Euro - will there be a balance?

The continued weakness of the euro, especially the weakness of the euro against the US dollar, will be an important theme in 2016.

One reason is the easing measures of the European Central Bank.

This is likely to bring a lot of cheap money to the euro zone.

Another reason is the tightening monetary conditions in the United States.

It is expected that the Federal Reserve will raise interest rates at least several times in 2016, which will strengthen the dollar exchange rate.

At the same time, it will bring a key question to 2016: will the euro and the US dollar achieve equilibrium (exchange rate reached 1:1)? In March this year, after the European Central Bank launched quantitative easing, Goldman Sachs said that the balance between the euro and the US dollar may reach September 2015, and Goldman Sachs postponed this forecast.

Goldman Sachs now expects the euro and US dollar to reach a balance at the end of 2016, which is consistent with the expectations of many other banks.

Goldman Sachs analyst said: "we believe that policy differences between the United States and other major central banks will be a long-term driver of the US dollar.

As the United States reaches the full employment rate, the inflation rate is close to the goal of the Federal Reserve. The European Central Bank and the Bank of Japan have a long way to go.

Said: in the context of the US Federal Reserve tightening monetary policy, the expansionary monetary policy of the European Central Bank and the Bank of Japan will make the euro and yen become a strong dollar in G10, the best currency in the world.

Outlook: 2016 European stock market holdings

In 2015, the European stock market outperformed other stock markets, and the Stoxx Europe 600 index rose nearly 8%.

The S & P 500 index increased by 0.9%, while the MSCI Asia Pacific Index fell 4.4%, while Brazil's Bovespa index plunged 13%.

Barclays Bank said the appetite for risk appetite has been widely suppressed and investors' confidence in the future is still insufficient.

But as yields will be higher than expected, and the ECB may also introduce more easing measures, this will further boost credit growth, boost consumer confidence and boost spending, and European stock market may still give investors two digit returns.

Banks expect the 2016 Pan European benchmark index Stoxx Europe 600 index to rise by 12%.

The British stock market is expected to be less than Europe in 2016, as the UK is heavily dependent on the commodity sector and has been badly hit by the commodity sector.

Some US strategists believe that, because of the divergence of policies between the central bank and the US central bank, the tightening of the Federal Reserve and the easing measures of the European Central Bank, it may make the US dollar stronger and damage the profits of US companies operating abroad. The overall mood of the market is to reduce US stock in 2016.

A common feature of most expectations for the 2016 European economy is optimism about earnings prospects.

Analysts have the highest expectations for companies in the eurozone.

They predict that if the ECB does not expect to take further easing measures, the euro zone companies will benefit from the fall in the euro exchange rate.

In addition, the acceleration of overall economic growth in the euro area will also increase profits and make corporate profits the key driver of the rise in European stock markets.

JP Morgan strategist said: "this year, euro zone companies have performed more than U.S. companies for the first time in five years.

Our view is that the profit margins of eurozone companies and US companies will continue to exist next year. "

As for the Stoxx600 index, JP Morgan expects the overall EPS growth rate to be 7.2%, and Deutsche Bank expects EPS growth of 9%.

Goldman Sachs expects earnings growth of 8% per share.

Barclays expects earnings per share in the European stock market to grow by 11%.

Barclay analysts said: "for those who think we are not realistic, we need to point out that excluding oil and materials industry, the current earnings per share of European stocks increased by 14% over the same period."

Morgan Stanley has opposite views on European earnings next year, and believes that Europe's earnings will be dim next year.

Morgan Stanley expects the MSCI European index's earnings to rise by 1%.

Morgan Stanley expects the gloomy outlook for European earnings next year, because commodities will be depressed next year and the benefits of the weak euro to Europe are also limited.

Analysts said that when picking stocks in 2016, investors should consider the weak euro, strong dollar, stronger economic growth and rising consumer confidence.

Taking into account these factors, analysts listed the most promising and worthy investment industries and companies in 2016.

Finance: to play the theme of economic recovery in the euro area, the financial sector is undoubtedly the best choice.

At present, stocks in the financial sector are cheaper than those in other industries.

In the financial sector, banks are particularly worth mentioning.

As inflation expectations rise and the economy improves, the euro zone's higher bond yields will benefit the banking industry.