Novo Nordisk (NVO, Financial) faced a significant stock drop, losing $93 billion in value due to underwhelming results from its new weight-loss drug. This decline has impacted the performance of major European stocks, which have been struggling to match the returns of their US counterparts. In 2024, the top ten US stocks achieved double-digit returns, driven by the "Magnificent Seven," while Europe's top six stocks, including Novo Nordisk, have seen losses.
The Stoxx Europe 600 index is on track for its worst performance relative to the S&P 500 in 25 years. European heavyweights face challenges such as smaller scale and dominance of old economy stocks. The GRANOLAS, a basket of European large caps, has a market value of $2.5 trillion, dwarfed by the $16 trillion of the US "Magnificent Seven."
Despite low valuations and potential economic recovery in Europe, strategists predict Wall Street will continue to outperform in 2025, with US tech companies expected to deliver strong profit growth.
