The liquidity driven rally in Europe has proved painful for defensive investors. Many distrusted the commitment of the ECB to pump in cash and missed out on the sharp re-rating of financials, industrials and resources.
At the same time, last year’s popular quality stocks fell out of favour; sector rotation is still a feature of the recovery. Will the ECB’s stimulation drive further market progress? While investors’ attention focused on the long term refinancing operation, this year’s surprise is that company results have sharply improved. Company outlook statements moved from last year’s unremittingly bleak tone to vaguely encouraging. Robust US economic data, with the unemployment rate falling to a three year low, is now helping many European companies with US operations such as CRH and Ashtead. ...
To continue reading this article...
Join Investment Week for free
Signup and gain exclusive members-only insights - all free of charge!
- Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
- Get ahead of regulatory and technological changes affecting fund management
- Important and breaking news stories selected by the editors delivered straight to your inbox each day
- Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
- Be the first to hear about our extensive events schedule and awards programmes
