Investors have turned increasingly positive on the outlook for European versus US equities – Deutsche Bank


Share:

The analysis team at Deutsche Bank, explains that with US equities trading at historically elevated valuation levels, investors have turned increasingly positive on the outlook for European versus US equities.

Key Quotes

“Our European equity strategist Sebastian Raedler argues that the three conditions that are typically required for European equities to outperform are not in place. First, Europe tends to outperform only when Euro area GDP growth is above that in the US, but neither our economists nor consensus expects this to happen either this year or next. Secondly, the relative performance of Europe versus the US tracks the trajectory of relative EPS growth – and projections by our strategy teams in Europe and the US suggest the US will continue to benefit from premium EPS growth this year (13% versus 9%).”

“Lastly, Europe has typically outperformed when the global composite PMI was above 55 (i.e. global GDP growth was strong, at around 4%), while our global economists’ growth projections suggest that it will ease back to around 53, from the current 53.6 (implying around 5% underperformance by Europe versus the US).”

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Follow us on Telegram

Stay updated of all the news

Join Telegram

Recommended content


Follow us on Telegram

Stay updated of all the news

Join Telegram

Recommended content

Editors’ Picks

EUR/USD advances toward 1.0850 ahead of Lagarde

EUR/USD advances toward 1.0850 ahead of Lagarde

EUR/USD is extending gains toward 1.0850 in the European session on Monday. The US Dollar is dragged lower by sluggish US Treasury bond yields, despite a tepid market mood. Lagarde's speech and US data are next in focus. 

EUR/USD News

GBP/USD recovers toward 1.2700 despite cautious mood

GBP/USD recovers toward 1.2700 despite cautious mood

GBP/USD has managed to reverse losses, heading toward 1.2700 on Monday, even as investors remain on a cautious footing. A modest downtick in the US Dollar alongside the US Treasury bond yields is lending support to the pair. BoE Pill's speech and US housing data are awaited. 

GBP/USD News

Gold price consolidates around 50-day SMA, downside seems cushioned amid sliding US bond yields

Gold price consolidates around 50-day SMA, downside seems cushioned amid sliding US bond yields

Gold price (XAU/USD) attracts some dip-buying during the early part of the European session, albeit lacks follow-through and remains below a two-week high touched on Friday.

Gold News

XRP price drops to $0.53 amidst concerns whether the SEC will settle its lawsuit against Ripple

XRP price drops to $0.53 amidst concerns whether the SEC will settle its lawsuit against Ripple

XRP price decline to the psychologically important level of $0.50 becomes likely as the altcoin drops to $0.53 on Monday. XRP holders are anticipating the Securities and Exchange Commission’s (SEC) next move.

Read more

Five fundamentals for the week: Fed favorite PCE stands out as turbulent month ends Premium

Five fundamentals for the week: Fed favorite PCE stands out as turbulent month ends

Core PCE, the Federal Reserve's preferred inflation gauge is the main event of the week. An update to US GDP in Q4 and January's Durable Goods Orders provides hard data. The forward-looking ISM Manufacturing PMI has the last word of the week.

Read more

Forex MAJORS

Cryptocurrencies

Signatures