26
Mar
New opportunities for Eurozone equities
Sustained growth in the Eurozone. Insufficient inflation. Risks of a strong Euro. Rise in long rates. Opportunities for Eurozone equities. Low PE and high yield.
Key points
- The end of quantitative easing heralds upcoming key rate normalisation
- The ECB will wait until inflation heads above 2% before changing its interest rates
- The risks of a strong euro are rising and affecting the economic situation and inflation
- For the time being, Eurozone growth is keeping up a sustained pace (+0.7% forecast in the 1st quarter)
- GDP growth for 2018 estimated at +2.4%
- Confidence remains high and is propping up the trend that is currently taking shape
- Long rates are on the rise
- New opportunities for Eurozone equities after the market correction
- Attractive valuations at just 13.3x 2018 profits (16.6x in the United States)
- Attractive 3.5% yield (1.99% the United States)
- European assets out-perform
