Patrik Lang, Head of Equities Research, Julius Baer | A further delay on 31 October seems currently the most likely scenario. General elections later on will decide the fate of Brexit. For continental European equities, we see a 10% downside in the event of a hard Brexit, mainly driven by financials and autos.
Igor de Maack (Natixis IM) | In contradiction of all the prophets of doom, the start of the year was one of the best of recent times. Despite a marked economic slowdown in the first quarter of 2019, buying risky assets has more than paid off. Publications of annual results and the first quarterly results contained no indications of a severe global recession.
Despite the elements of surprise in yesterday’s general elections in Germany, most analysts and economists believe the overall impact on the financial markets will be limited in the short and medium-term. But with the status quo of the Grand Coalition no longer available, there will now be a period of uncertainty.
UBS | German 10yr bond yields have turned negative and some European corporates are effectively “being paid to borrow”. What are the implications for European equities? Although there has been a deepening of Global growth fears in recent weeks, economic surprise indicators and PMIs have not collapsed.
LONDON | Barclays | For the Bull market to continue we now need companies to deliver on earnings.
May 18, 2015 | UBS | Q1 reporting season is roughly 75% complete and the European cycle keeps rolling on with FX and a domestic recovery feeding through.
The Corner | April 11, 2015 | It’s not just the Nikkei beating historic records: European equities continue to benefit from tail winds thanks to the low euro and improving macroeconomic figures. In the past week, climbs ranged from a shy + 0.10% on the Spanish Ibex, to a much stronger + 0.54% on the German DAX, representing a record for the index. The British FTSE rose by + 0.35%.
The Corner | March 11, 2015 | The market still points to emerging markets as one of the most vulnerable areas in the global economy. The absence of a rebound in the price of commodities (despite oil’s recent revaluation) is hampering these countries’ economic recovery.
MADRID | By Soren Willemann at Barclays | European credit markets have been outperforming equities persistently since October 2014. However, following the recent ECB announcements, this relationship has shifted dramatically, with credit spreads now trading wide vs equities on a historical basis.
MADRID | The Corner | Despite the good performance of Western equities, many values are beginning to show signs of vertigo that could lead them to correct some of the gains of the past weeks in the coming days. In addition, the fact that trading volumes are shrinking as indexes advance is a clear sign that there are investors who feel dizzy levels. Therefore, Link experts point out, we shouldn’t rule out some small reductions in the short term even if it’s in an upward trend context.