Leverage Loved in Europe Stocks Shows Draghi Put Is Working
- Cheap borrowing pushed up shares despite slowdown concern
- Skeptics say leveraged companies will suffer in a rate hike
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For a European company, the weaker its finances, the stronger its shares.
Loose monetary policy has helped lift stocks with the highest leverage this year, pushing them ahead of the Euro Stoxx 50 Index by the most since 2011, data compiled by Bloomberg and Morgan Stanley show. The past two months saw the steepest outperformance, while European shares suffered their most painful quarter in four years.