Morgan Stanley: 100% of the sector has beaten NII so far, still a clear buy. Álvaro Serrano (analyst) highlights another quarter of solid results from European banks with 100% beating NII (rising rates and lower deposit betas) and contained credit risk. That said, the good results and the lack of growth in RWAs allowed banks to boost shareholder distributions with several of them (CABK, DBK, HSBC, BARC…) announcing new buyback...

A&G | The Q1 results season was solid on both sides of the Atlantic. And up to now EPS for 2022 has been revised 3% upwards by S&P500 and 11% by the STOXX 600. The weighting of the raw material sectors, particularly in Europe, helped to drive EPS estimates (ex EPS estimates for raw materials they rose only 2% YTD in Europe). We are beginnning to see signs of a...

Patrik Lang, CFA Head of Equity Strategy Research, Julius Baer | For Q2 consensus expects S&P 500 earnings to decline 43.9%, which would be the largest y/y earnings decline since Q4 2008 (-69%). For Q3 consensus expects earnings to decline by -25.4% and for Q4 by -12.8% followed by 28% earnings growth in FY 2021. Based on our macro models and historical post-recession earnings patterns, we see upside risk to consensus expectations for both H2 2020 and FY 2021.

Alejandro Arevalo (Jupiter’s Head of Strategy, Emerging Markets) | One might think that emerging market debt has had difficult year, but it’s been quite the opposite. At the time of writing, the major EM hard currency indices have all returned more than 11% year to date.

Keith Wade, chief economist at Schroders │ The yield curve has been a reliable element in the prediction of US recessions over the last four decades. With only one exception, every time the curve has inverted, the US economy has entered into recession within 18 months.

The share price of Deutsche Bank has risen + 9% since 26 October. This reaction is explained by the entry of Hudson since the results for Q32018 were unconvincing and the reaction to the stress tests did call attention. The US hedge fund Hudson Executive Capital has invested 550 M€ to take control of 3.1% of the capital – equivalent to 8.6€/share. Hudson thus becomes the fourth largest shareholder behind the Chinese group HNA (7.6%), a Qatari fund (6.1%) and Blackrock (5%).