As seasoned market watchers know, even the most moribund of felines can ricochet off the pavement. Indeed, the propensity for equities to stage brief — groundless — rebounds in a bear market was in full evidence last summer in the US. But the recent strong showing in European equities — with the Euro Stoxx 600 up about 10 per cent since August 2022 — could prove more durable.

Granted, European companies are unlikely to post strong earnings in 2023. Consensus earnings per share growth is a measly 0.6 per cent, according to Sarah McCarthy at Bernstein. And even that may be too high, as Lex has recently warned.

The economy may no longer be expected to tank. But a mild recession is still likely. And margins do not yet reflect the squeeze from higher supply costs.