27 Jan 2015
European quities might boost if macro data ticks-up – BAML
FXStreet (Barcelona) - The Bank of America Merrill Lynch lists the reasons behind increase in preference for European equites, noting that a further boost can be realised in stocks if the European macro data ticks-up.
Key Quotes
“Investors are fatigued by US equity valuation, fear US EPS/GDP downgrades, see no catalysts for Japan/EM & believe Europe is structurally oversold.”
“ECB QE exceeded expectations and since ECB will now absorb 2X net issuance of Euro governments bonds contagion risks within Euro area now deemed low.”
“Investors believe Euro area macro data at a turning point thanks to lower oil/currency/rates.”
“Any sign of a pulse in Eurozone macro next 4-8 weeks is likely to boost further long-only allocations to European stocks. ECB has caused hedge funds to increase EU exposure; long-only allocations also likely to rise if inflation expectations & PMI’s tick-up.”
Key Quotes
“Investors are fatigued by US equity valuation, fear US EPS/GDP downgrades, see no catalysts for Japan/EM & believe Europe is structurally oversold.”
“ECB QE exceeded expectations and since ECB will now absorb 2X net issuance of Euro governments bonds contagion risks within Euro area now deemed low.”
“Investors believe Euro area macro data at a turning point thanks to lower oil/currency/rates.”
“Any sign of a pulse in Eurozone macro next 4-8 weeks is likely to boost further long-only allocations to European stocks. ECB has caused hedge funds to increase EU exposure; long-only allocations also likely to rise if inflation expectations & PMI’s tick-up.”