Europe Gains Momentum Amid U.S. Uncertainty

Europe gains momentum as global financial markets witness a significant reallocation of assets toward European economies, with particular interest surging in the defense sector. Germany’s DAX index has recorded an impressive 9% growth since the beginning of 2025, according to Yanko Hristov, Head of Institutional Sales and Business Development at Alaric Securities, during his appearance on Bloomberg TV Bulgaria’s “Business Start” program.

Hristov attributes this reorientation primarily to ongoing uncertainty in the United States markets. However, he cautions investors about the sustainability of the 40-50% growth seen in some European companies since January, suggesting a more measured approach may be prudent.

Sector Opportunities and Challenges

While some technology giants are experiencing declines, the sector continues to offer promising investment opportunities. The pharmaceutical industry is also developing robustly, though it faces potential challenges as new regulations are expected in the U.S. market. Meanwhile, the banking sector maintains its traditionally strong position.

“Trump’s administration wants to lower drug prices in the U.S., while Europe is a major producer of pharmaceuticals. Someone will ultimately have to pay the price. The president’s aggressive approach has created significant tension in these markets,” Hristov noted.

Political interference has become increasingly evident in the technology sector, with Dutch company ASML serving as a prime example of this trend. Interestingly, some Chinese tech indices are demonstrating double-digit growth. Trump’s initiative to reshore manufacturing to the United States has yet to produce substantial results, and the development trajectory of robotics and artificial intelligence in America remains uncertain.

The “Sell America” Phenomenon

“The ‘Sell America’ sentiment we’re observing is driven by a combination of multiple factors,” Hristov explained. “Investment funds are prioritizing security, and Europe—being a wealthy continent with significant consumer savings—appears to be benefiting from these prevailing sentiments.”

As Europe gains momentum, the cost associated with the dollar’s devaluation grows increasingly concerning for the United States. Hristov pointed out that during Trump’s first term, there was significant emphasis on the strong performance of the S&P 500, yet now the index has declined by 6%. “The most critical issue involves bonds. When political considerations influence the purchasing of U.S. debt, market conditions become highly unpredictable,” he cautioned.

Geopolitical Factors and Market Outlook

A resolution to the Ukraine conflict would likely trigger substantial market gains, though Hristov emphasized that a diplomatic solution should not be pursued regardless of consequences. “Fund managers currently face extraordinarily complex decision-making environments due to intense geopolitical dynamics and persistent instability,” he observed.

American companies have been overvalued for an extended period. Hristov anticipates further market corrections and deceleration in certain stocks, with recession concerns being well-founded. The possibility of a global economic downturn cannot be dismissed.

“Conversely, European interest rates have been reduced seven times since last year, which liberates capital for investment opportunities,” Hristov highlighted.

Regional Investment Considerations

Poland represents an intriguing market worthy of investor attention. The United Kingdom offers future potential despite its current challenging economic landscape.

“Europe requires meaningful deregulation to narrow the competitive gap with the United States,” Hristov concluded. “The present circumstances should be strategically leveraged to attract substantial investment into European markets.”

Watch the full commentary in the video.