Doog.dog

It’s a significant milestone for the European markets. As of late January 2026, the Stoxx Europe 600 has officially notched its seventh consecutive monthly gain, marking its longest winning streak since the summer of 2021.

Here’s a breakdown of what’s fueling this rally and why it matters:

📈 The Winning Streak in Numbers

• Duration: 7 months (the longest since the 10-month run that ended in August 2021).
• Milestones: * The FTSE 100 made history this month by breaching the 10,000-point mark for the first time.
  • The DAX (Germany) and CAC 40 (France) are both trading near all-time highs.
• Monthly Growth: The Stoxx 600 climbed approximately 3.2% in January alone.

Key Drivers of the Rally

• Better-than-Expected Earnings: The Q4 2025 earnings season has been a “relief rally.” Companies like Adidas and ASML delivered strong guidance, proving that European corporates are successfully navigating global trade tensions.
• Economic Resilience: Eurozone GDP grew by 0.3% in the final quarter of last year, defying earlier predictions of a stagnant economy.
• Sector Rotations: * Defense & Aerospace: Stocks in this sector have surged as European nations ramp up domestic military spending.
  • Luxury: Heavyweights like LVMH saw a rebound in demand from Asian markets.
  • Banking: Higher interest rates (which have remained stable rather than crashing) continue to bolster profit margins for major EU lenders.

The Outlook for 2026

While the momentum is strong, analysts are watching for two potential “speed bumps”:

1. Inflation Rebounds: If energy prices fluctuate, central banks might delay further rate cuts.
2. Trade Policies: Any escalation in global tariffs could disproportionately affect export-heavy economies like Germany.

Analyst Note: “The European market is no longer just the ‘cheap alternative’ to Wall Street; it’s becoming a growth destination in its own right, especially with the ’10k’ psychological breakthrough in London.”