Why investors are not buying Europe’s revival

The profits of European listed firms rose during the second quarter of this year. In much of the rest of the world, that would be unremarkable. On the old continent, 4.3% earnings growth in the three months to June, compared with the year before, was enough to provide a boost to the Stoxx 600, its benchmark index. After all, the growth came after four consecutive quarters of falling earnings. Markets strategists are now talking up European stocks. Morgan Stanley, an investment bank, even says that they are “in the sweet spot”.