The headwinds and tailwinds for European income investors

Stephen Macklow-Smith, manager of the JPMorgan European investment trust, analyses the sector winners and losers following the end of Europe's earnings season.

The recently concluded second quarter earnings season saw three-quarters of companies matching or beating revenues estimates. This was an improvement on the first quarter results.  As the chart below illustrates, while the current level of yield is lower than it has been in the recent past, broadly speaking, higher yield levels have tended to be associated with periods of crisis.We are now at a normalised level, with the market valuation having the potential to move up from here without looking expensive.  Dividend growth Take the banking sector as an example. Having emerged from t...