After the current phase of consolidation of European indices, one of two things can happen. Either we exit this phase on the up, which seems unlikely without the big European names being involved. Or we return to renewed cyclical or political tensions, in which case quality stocks will benefit from their defensive characteristics. Either way, it seems wise not to offload large blue chips.
At yesterday’s press conference Mario Draghi confirmed four points: 1. The Governing Council (GC) is concerned with the risk of prolonged low inflation. 2. There was ample discussion on several measures to be taken (including non-conventional), but a final decision has not been made. 3. If possible, the GC’s members would prefer to wait until […]
The ISM manufacturing survey was published on Tuesday. The headline index bounced back further, climbing from 53.2 in February to 53.7 in March, slightly below consensus estimates (54.0). This was the second monthly increase in a row. However, the level reached in March remains well below December’s reading (56.5), and the index definitely fell sharply […]
Equity markets in developed economies (US, Europe and Japan) have staged impressive rallies since September 2011, gaining around 70% (with dividends reinvested), which equates to annual returns averaging nearly 25%. With the Fed’s monetary policy gradually reverting to normal as 2014 unfolds and with fears being expressed about emerging markets, questions are being asked about just how sustainable the ongoing rally on equity markets is. Earnings […]
Real personal consumption expenditure increased by 0.2% m-o-m in February, in line with consensus expectations. However, January’s figure was downwardly revised from +0.3% to +0.1%. As a result, consumption grew by only a meagre 1.3% annualised between Q4 and January-February. This followed a strong q-o-q growth rate of 3.3% annualised in Q4 2014. Together with […]
Risk assets, especially equities, are once again whetting investors’ appetites as fears that had loomed large over emerging markets have gradually been diminishing. After the January setback, we have witnessed a mirror-image positive showing in February.
The euro area average composite PMI (53.2) is still consistent with GDP growth of 0.3%-0.4% q-o-q in Q1, slightly above Q4 growth and in line with our scenario. As a result, we are still expecting euro area GDP growth to fluctuate around 0.3% for the foreseeable future. According to this scenario, the euro area economy […]
Government bonds, like US Treasuries, offer investors little appeal in terms of their expected returns. However, as US economic growth is patently becoming firmly anchored and the Fed’s monetary policy reverts to normal, the likely drift upwards in US interest rates will clearly be an argument increasingly in their favour.
The harsh winter weather in the US caused a slowdown in the dynamic trend being shown by economic statistics to that point. The numbers still seem to be travelling in the right direction and should gradually reflect an accelerating upswing in the months ahead.