>> Shoppers at Carrefour may be loading up their trollies, but here's the puzzle. Investors aren't doing the same with shares in big European companies, even though stocks in the region look cheap compared to U.S. peers. Measured by earnings per share, European stocks are now about 20% less costly.
That's the biggest discount since the euro zone debt crisis. Yet share price gains in the region have lagged the U.S. all year. Reuters correspondent Helen Reid has been trying to unpick the riddle.>> Well, politics in the euro zone have become quite fraught again recently, with Italy's new populist government proposing budget plans that go against the European Commission's guidelines.
And there's also Brexit negotiations, which investors are quite scared will go down to the wire. There's also the specter of a global trade war. The European shares are quite uniquely exposed to the global economy, so they look quite vulnerable to increased tariffs.>> Carrefour among the big names to report Wednesday as European earnings season gets in to full swing.
Later in the week, look out for numbers from Novartis, Nestlé and Pernod Ricard. U.S. companies forecast to see profits jump by a fifth or more in the third quarter. The forecast for Europe is a less stellar but still solid 14%. Anything less probably won't go down well with traders.
>> Because the market is so pessimistic people expect that companies which miss expectations are going to be punished far worse than those which beat expectations will be rewarded.>> Tech stocks could be a curious consolation for Europe, though. They were behind the big tumble on U.S. and Asian markets recently.
If that continues, Europe's lack of big tech names will suddenly look like an asset.