Results for search of category: Eurozone

Signs of Life in the Eurozone

Our charts for Eurozone equities relative to the rest of the world have suddenly gone vertical. The change started in late June and the charts have improved in each of the last four weeks. It is now supported by improving lead indicators in cyclical sectors, like Materials and Industrials, and deep value sectors like Financials. The latter are key to the rehabilitation theme. Without them, a Eurozone rally will be anaemic; with them it could be surprisingly powerful.   [Read More... ]

Lessons from a Fast Market

Yesterday’s sell-off was so brutal that it probably marks the start of a different regime in equity markets. We are out of Phase 1 of the recovery and into a second more sceptical and nervous regime. Both the US and the UK broke of out the uptrends in our daily indicator that have been in place since March. The technical situation is better in the Eurozone and Japan, while the level of financial repression is China so severe, in our view, that the indicator has lost most of its signalling power.  [Read More... ]

Six Sector Ideas

Where to look in advance of the Q3 results season. The macro picture is confused. Our last note argued that we are in the late late-cycle for equities, but we could go on like this for months and there are no new developments to prove or disprove this view. So, our focus shifts to sector selection. We highlight six sector ideas – one from each region we cover – where we think there is potential for a major upgrade or downgrade in the near future.  [Read More... ]

Eurozone Rising

The Eurozone will soon be the top-ranked equity region in both our euro and dollar-denominated asset allocation models. We think this will prompt US investors to have another look across the Atlantic. We think there are three sectors where they will concentrate their buying to start with: Consumer Goods; Industrials and Utilities. All three sectors are capable of outperforming their US counterpart and the US index as a whole.  [Read More... ]

Health Warning

The difference between our recommended sector weights for the UK and the Eurozone has reached a seven-year high. Of course, Brexit is part of the explanation, but for most of the period since the referendum this divergence was below its long-term average. It has always been dangerous to transfer sector views from one region to another without careful thought, but the danger now is much higher than normal.  [Read More... ]

Whistle-Stop Tour

We finally have the bounce in risk assets that we expected in the run-up to Christmas, but it is not yet strong enough to break any of the downtrends that developed earlier in Q4. We are at maximum underweight in all our equity vs bond models and similar levels of risk aversion apply in our fixed income and equity sector models. The only exception is that we have an overweight on Emerging Markets in our global equity model and may be about to downgrade the US to underweight.  [Read More... ]

Simple Explanation

Weakness in US Industrials can often be a signal that we are close to a period of market disruption. That signal is flashing yellow, as are the signals from other equity regions such as the UK, the Eurozone and Japan. We have red flags on Industrials across all of our credit models. We don’t have a clear and obvious cause yet, but the simplest explanation could be that we are closer to a significant slowdown than consensus thinks.  [Read More... ]

Can US Equities Break-Out?

Technical analysts are waiting for US equities to hit a new all-time high. Our model suggests that they have already broken above an important moving average relative to the total returns from cash. In local currency terms, the Eurozone, the UK, Switzerland, Australia and Canada have all done the same in the last month. Alas, Japan, China and most EMs are still a long way from the level.  [Read More... ]


    Full Blog Archive:


  • Search Blogs by Category