Eurosummer lives on as retail investors flock to the continent
Turbulence created by US tariffs is continuing to be a boon for European investment, with retail investors flocking to the continent, writes Susannah Streeter in today’s Notebook
Retail investors flock to Europe
Many of us will have put away the suitcases and passports, ready for autumn to descend, with our continental getaways becoming a distant memory. But, as far as an investment destination is concerned, Europe is in demand. Retail investors have been flocking to European shores, with inflows into funds focused on the region rising throughout 2025 following last year’s outflows.
The turbulence induced by US tariff policy is also pushing institutional investors to seek more opportunity this side of the Atlantic. European stocks are still trading at a discount on a historic basis and, although concerns linger about economic growth and political risks, mega-trends unfolding put the region firmly on the map of opportunity.
Defence spending is rising rapidly across the continent, supporting growth across military supply chains, while the decarbonisation push offers prospects for utilities and clean energy companies. It’s clear there’s a shift in sentiment from the US underway, amid concerns about long-term outlook. This isn’t surprising given the latest shaky American jobs market snapshot, and the lofty valuations tech giants have reached.
But, just like searching for a seat on a low-cost airline, this recent surge in interest pushes up prices. Valuations of some listed European companies have been rising sharply, so widening the net to seek out value will be crucial and as always diversifying across sectors will help spread the risk. Think about it in the same way as when you go on a longer haul budget flight, you want to be prepared and invest in snacks from home as well as airport cafes and shops. Counting on one menu of overpriced airline food can leave a bad taste, whereas a diversified pick and mix approach will always be a good start to any journey.
Cyberwar in the Cotswolds
While Marks and Spencer appears to have recovered from its damaging cyber-attack, a far corner of Middle England has been targeted by hackers – the Farmer’s Dog, Jeremy Clarkson’s pub in the Cotswolds. They didn’t just make off with a cask of cider and box of pork scratchings, the breach saw criminals siphon $27,000 from the venue’s computer system.
The catalogue of attacks over this past year on some of the UK’s biggest names from M&S to Jaguar Land Rover, and now even part of Clarkson’s rural Diddly Squat empire, is just the tip of the iceberg. Huge global networks of organised cyber criminals are operating, leveraging AI to more efficiently target system vulnerabilities. Companies large and small are still woefully unprepared to counter what is emerging as one of the biggest corporate risks through direct financial losses, operational disruptions and severe reputational damage. While the AI enablers of the Magnificent Seven have grabbed the investment limelight, there appears to be big opportunity ahead for cyber security firms defending us against AI enabled attacks, as the threats grow more dangerous.
Quote of the week:
‘’Cybersecurity is business risk, and it demands board-level responsibility’’
Juan Pablo Castro, director at Trend Micro and cybersecurity strategist
Is screentime such a bad thing?
Chairing and speaking at global conferences gives me the opportunity to dive deep into investment trends rippling through the world so I jumped at the chance to spend the August Bank Holiday weekend hosting a huge gaming event in the Middle East. The New Global Sport Conference brought together 1,500 investors, creatives, developers and athletes. They gathered to glean insights about Saudi Arabia’s big push into esports, sports and gaming, and in particular the drive for much greater gender equality opportunities by 2030. With the esports World Cup culminating in Riyadh, drawing an audience during the tournament of 750m people, it’s clear gaming has brought about a global cultural shift, one which should not be underestimated. As a parent, I am thinking twice about excessively limiting screentime; gaming is part of the fabric of a new society and offers viable career choices.
Skincare-obsessed tweens bring a retail boost
A yawning consumer confidence gap is developing, with a revival in optimism among the young but a big dip in confidence among the over-65s. This is showing up in spending trends. Although it’s still tough for clothing stores, with the second-hand sales eating in, demand for computers and gaming equipment boosted overall sales. And the lipstick effect is alive and well with Barclaycard data showing a 53rd consecutive month of growth for health and beauty spending. It’s a trend flourishing in my household too, with two teen boys and preteen girl fixated on games, skincare and Vinted.
Fried chicken battles
Our demand for fried chicken is seemingly insatiable and now Dominos wants a slice of the action. It’s launching a Chick ‘N’ Dip sub-brand across the North West of England and Northern Ireland, with plans for a wider rollout. This extra offering fills me with trepidation given that I am already trying to push back the wave of late-night takeaway deliveries the assembled youth consume at our house. For me, you can’t beat the M&S fried tempura chicken, so crispy and gluten free to boot that I have to hide it under the cabbage to avoid it falling victim to late night fridge raids. I am pleased to say even the cyber hackers didn’t succeed in bringing a halt to my steady supply over the summer months.
Susannah Streeter is head of money and markets at Hargreaves Lansdown