Macro is priced in
A&G Banca | The last macro data from November are generally better , but as the indexes of economic surprises point out, the rebound is less remarkable than the consensus forecast.
Europe
MasMovil does not need a strong investment in 5G
The broadband market continues to grow in Spain: 31% penetration in Spain vs. 42% on average in other European countries, analysts at Morgan Stanley point out.
The S&P 500 has gained 233% since 2010, as opposed to 92% for the MSCI Europe
Igor de Maack (Natixis) | Years of negative rates may well be coming to an end, with a reversal of investor sentiment for bonds over the last few weeks. In fact, the French 10-year rate is now verging on 0%. However, these years will leave their mark in terms of the extravagance of the monetary policies implemented for the purposes of “Saving Private Capitalism”, lost on the battlefield of excessive debt and driven into the trenches of complex finance.
Don’t be too impressed by earnings “beats”
DWS | Quarterly earnings are down year-on-year and 2020 forecasts are being cut further. It’s hope that is driving markets for now.
Real estate sector: Monetary policy and bond IRR could boost investment flows
Morgan Stanley | As we indicated in our last real estate strategy report, this has been the worst sector in Europe in 2Q19 (oversold and with a relative performance of 3.5sd below its 12MA). This has been mainly motivated by concerns about the proposal to freeze rental prices in the city of Berlin (and its possible spread to other cities in the country) as well as the uncertainty regarding Brexit.
In-depth: Naturgy, its strategic pivot gives it +43% vs Ibex -8%
José Benito de Vega | Naturgy has enjoyed a very positive stockmarket evolution since the beginning of 2018, in which period its value has increased 43% compared to an 8% fall of the IBEX35. There are various factors behind his positive performance compared to the index, which was accentuated following the presentation of its Strategic Plan in June 2018. However, after the positive evolution of its shares, it is trading with elevated multiples and at a premium to the European sector which, in our opinion, does not take account of the regulatory risk.
Profit growth in Europe between 7-9% for 2019
Santander AM | Stock markets maintain strong profits this year. The strength of the profit taking as a result of the new tariff increases to China should not hide their good behavior along the year.
European banks: company credit growth registers highest growth rate in 10 years
Bankinter | The private sectors credit stock increases +3.4% in April (vs +3.2% before). A strong performance in company credit stands out (+3.9% vs 3.6% before) as well as credit for buying houses (+3.6% vs +3.5% before).
Mystery behind European Banks vs Utilities PER differential
In April 2018 both banks and utilities had practically the same PER, around 12.5. Since then there has been an extreme relative movement between them, with electricity companies getting more expensive and banks cheaper, analysts at M&G Valores point out.
The Japanisation of the European economy
José Ramón Díez Guijarro (Bankia Estudios) | Fortunately, in the EMU, with the exception of the second half of 2014, when the expected inflation expectations traded by the five year German bond reached negative territory, this deflation risk seems much more contained. This could be the principal difference between the European and Japanese economies.