Can German fiscal stimulus boost European stocks? in Stock News 17/02/2026 Bank of America said Germany’s long-awaited fiscal stimulus is beginning to support growth, but warned that the recent rally in European equities may already reflect much of the upside and could set markets up for disappointment. Early signs of the stimulus effect are emerging in economic data. German factory orders have risen more than 40% on a three-month annualised basis, and the bank’s economists have lifted their 2026 growth forecast for Germany to 1%, helping push their outlook for the Euro area to 1.2%. Despite those upgrades, the bank said private demand growth across the region is not expected to strengthen further from late-2025 levels. That suggests limited scope for a pickup in business activity indicators, even as stocks have already climbed about 15% over the past six months. Bank of America said markets now appear priced for a stronger recovery than current economic trends support. Other growth drivers, including credit conditions, the inventory cycle and currency moves, have also weakened, which could weigh on further gains. It remains negative on European equities overall and projects about 15% downside, with cyclical stocks seen underperforming defensive names by roughly 10%. Within the region, however, the firm turned more positive on German stocks. German equities have lagged the broader market by about 11% since May last year, leaving valuations near a 14-month low. With fiscal support starting to filter through, the bank sees a more balanced outlook and about 5% potential outperformance in the coming months. It also prefers domestically focused companies and small caps, arguing they are priced for a sharper downturn in activity than appears likely. Real estate and telecom sectors, it said, also look mispriced relative to expected interest rate and risk premium trends. Source: Investing.com 2026-02-17 hellenicshippingnews... window.___gcfg = {lang: 'en-US'}; (function(w, d, s) { function go(){ var js, fjs = d.getElementsByTagName(s)[0], load = function(url, id) { if (d.getElementById(id)) {return;} js = d.createElement(s); js.src = url; js.id = id; fjs.parentNode.insertBefore(js, fjs); }; load('//connect.facebook.net/en/all.js#xfbml=1', 'fbjssdk'); load('https://apis.google.com/js/plusone.js', 'gplus1js'); load('//platform.twitter.com/widgets.js', 'tweetjs'); } if (w.addEventListener) { w.addEventListener("load", go, false); } else if (w.attachEvent) { w.attachEvent("onload",go); } }(window, document, 'script')); tweet Share