Okay, class, listen up. What’s the name of the world’s second-biggest economy?

Bueller? Bueller? Anyone?

No, it’s not China. It’s the eurozone.

The eurozone is the economic and monetary union of 19 of the 27 European states that have adopted the euro as their common currency. Collectively, its annual gross domestic product (GDP) currently hovers at $13.3 trillion, making it the second-largest economy in the world if considered as a single country.

Okay, I posed a trick question. But here’s my overriding point: investors in search of growth alternatives shouldn’t ignore Europe.

The coiled spring…

President Biden’s infrastructure plan, released Wednesday, cheered investors. The S&P 500 climbed 14.34 points (+0.36%) to close at a record high, and the tech-heavy NASDAQ soared 201.48 points (+1.54%). However, the Dow Jones Industrial Average fell 85.41 points (-0.26%) as financial stocks continued to suffer fallout from the Archegos Capital debacle. In pre-market futures contracts Thursday, all three U.S. indices were trading higher.

European equities also have been rallying, albeit in seesaw fashion like their American counterparts due to changing pandemic conditions. The European benchmark iShares STOXX Europe 600 UCITS ETF (DE) is up 7.6% year to date and 40.4% over the past 12 months, compared to 6.17% and 53.5%, respectively, for the SPDR S&P 500 ETF Trust (SPY).

The STOXX Europe’s performance is all the more impressive in light of the eurozone’s especially acute struggles during the pandemic. The virus hit the Old World hard.

The eurozone economy contracted by 0.7% in the fourth quarter of 2020, following an unprecedented 12.5% expansion in the previous three-month period and a record 11.6% contraction in the second quarter.

For full year 2020, the eurozone’s GDP fell by 6.6%. That’s worse than the declines of 4.9% for the global economy and 2.3% for the U.S. China’s GDP actually grew by 2.3% in 2020, as Asia got an early handle on the pandemic.

Economic weakness in Europe is projected to persist through the first quarter of 2021, with analysts surveyed by FactSet expecting a 1.1% decline in GDP for the eurozone in the quarter.

However, for the rest of the year, Europe is poised to snap back like a coiled spring. The eurozone’s economy is expected to surge in the last three quarters of 2021, with annual growth projected to reach 4.3% in 2021 and 3.9% in 2022.

Britain’s exit from the EU, aka Brexit, is a headwind for European companies but it’s not enough of an impediment to stop the region’s economy from bouncing back.

Read This Story: London Calling: Four Ways to Profit from Brexit

The Continent’s appeal is further enhanced by the determination of the European Central Bank as well as Europe’s leaders to maintain low interest rates to combat economic damage from the pandemic.

At the same time, EU governments are abandoning unpopular austerity policies that had weighed on their respective economies. The eurozone is pulling out all the stops in 2021, and it will be tantamount to a shot of adrenaline for European business. The time to get in on the action is now, while the investment herd fixates on China and Wall Street.

European blue-chips overall are undervalued right now, their share prices dampened by the pandemic. And yet, the EU is home to several of the world’s biggest, best-known international corporations. They’re superbly managed, boast solid balance sheets and make renowned brand names that are beloved and trusted in the U.S. and around the world.

If you’re in search of reliable growth stocks for the post-COVID recovery, don’t be parochial. Look to Europe.

European industrials lead the way…

As of this writing, more than 90% of companies in the STOXX Europe 600 have reported fourth-quarter 2020 earnings. These companies are performing better than expected. The percentage of companies reporting actual earnings above estimates was 57% while 33% came in below expectations.

Industrials is the best performing sector in Europe, reporting a robust year-over-year earnings growth rate for Q4 of 122% (see chart).

As global economies re-open, factories in Europe are starting to hum again, especially in the manufacturing powerhouse of Germany, a country that serves as the growth engine for the Continent.

The global roll-out of 5G (“fifth generation”) wireless technology has gotten a head start in Germany and other developed countries in Europe. Back in 2013, the European Commission established a Public Private Partnership on 5G (5G PPP).

5G PPP is the EU’s main initiative to nurture research and innovation in 5G technology. With its lightning fast download speeds, 5G is driving growth and innovation in a wide range of sectors.

5G implementations already have taken hold in many cities across Europe. Federal and local governments in Europe are typically more prone than those in the U.S. to subsidize infrastructure such as 5G.

Our investment team has found one little-known technology company that’s critical to the successful implementation of 5G in Europe and around the world. The firm’s stock could hand you a windfall within the next six months. Click here for details.

PS: Are there any topics that you’d like me to cover more often or in greater depth? Let me know: mailbag@investingdaily.com.

John Persinos is the editorial director of Investing Daily. To subscribe to his video channel, follow this link.