Hugh Gimber, an executive director and global market strategist at JPMorgan Asset Management, believes the recent slump in European stocks presents a buying opportunity. He attributes the sell-off to a fear-driven mispricing rather than a fundamental reassessment of value, following a 40% rise in Brent and WTI crude futures in March.
Contributing to this optimistic outlook is the expectation of an emerging U.S.-Iran agreement that could unfreeze Iranian assets, adding oil supply back into global markets. Karen Ward, JPMorgan Asset Management's chief market strategist for Europe, the Middle East, and Africa, suggests oil could fall to $70 a barrel within weeks, disproportionately benefiting Europe as a net energy importer.
While European equities have lagged behind their American counterparts, Gimber sees this pessimism as an advantage, as a decline in oil prices could lead to a larger reaction in European equities, outperforming current investor expectations. JPMorgan forecasts Brent crude to average $71 per barrel in the final quarter of 2026, a significant increase from earlier predictions, indicating that the oil shock and geopolitical tensions are being modeled as a 21-day event.
The investment strategy recommended by JPMorgan is broad diversification, with a small bias towards Europe, rather than taking large, active positions. Gimber emphasizes that diversification, which had not been effective for the past two years due to the dominance of expensive US tech stocks, is likely to work again in the current volatile environment.
