Despite negative returns for the MSCI Europe Index last year and a 5% decline this year, these markets are still not cheap. Prices for European equities declined fairly steadily last year and the first six weeks of 2016, as earnings forecasts were revised downward, consistent with the weakening earnings and economic backdrop. Stocks and growth forecasts have rebounded with energy prices more recently. But have they fallen enough to make Europe attractive, considering this background? Data suggest that they have not [Figure 3]. Forward valuations for the market suggest a PE of around 15x expected 2016 earnings. This is consistent (if not at a premium) with the longer-term average for the market.