The commercial conflict between the USA and China and the collapse of the bond market are penalizing the green ticket And, more generally, the dollar area, which has lost appeal in recent months, in favor of uses judged more promising. In this direction, the Old Europe returns to the jokealso driven by the prospect of an acceleration of investments.
The European stock market – highlights Pictet Asset Management – It is recording positive performances from a couple of quarters now. A situation generated by multiple factors, including Very convenient assessmentsless geopolitical risk, doubts about the persistence of American exceptionalism (growth of profitability and profits), Increase in public spending German. “At the moment, there seems to be a lot of space for positive surprises on the positioning and evaluations front: the excess of pessimism has been corrected”, underline the analysts of Pictet, adding that “something is legitimate to expect, in terms of positive thrust, from the repatriation of European capital from the USA to domestic markets”.
Keep prudence and wait
“There German tax policy has had an impact on the sentiment of the investors “, but according to the experts“ it will be necessary evaluate the implementation phase in Germany and how much Europe will make as a whole ”.
“The big question mark, then, is to understand If the tariff truce situation continues And what will be the agreement that Europe will be able to find with the United States on the commercial exchange front. Here the situation is fluid – it is stated – with days of optimism for negotiations that alternate with new negative tears such as the announcement by the USA of the doubling of the duties on the imports of steel and aluminum “.
The most interesting sectors to focus on
Beyond the cascade effect on the EU price lists, There will be some sectors that will do better of others. The financial sector, Seocondo Pictet. It could continue on the road of Surforms. At this moment he has played a leading role – together with the defense sector – for the recovery of European price lists. The banksin particular, were very generous towards shareholders with Dividends and buy-backs And this is a factor sought by the market. Much, however, will depend on the path to the banking union.
A sector on which the interest of investors has been very modest for now, however, is that of Pharmaceutical titleswhich are found with rather “attractive” assessments. There have been several reasons for the disappointing results – explain the analysts – from the attitude of the USA administration, between risk of duties and request for the reduction of the price of drugs, up to the not very happy situation of some leading companies in the sector. The current evaluations incorporate these considerations, which is why the entry point can be very attractive.
The other promising sectors are linked to the EU spending plans, especially those related to the new German economic policy. There defense remains one of the most promising sectors, but in another the issue of investment it may be that infrastructuretherefore the sector of Construction and industrial.
Europe and emerging markets to diversify
With a view to a good asset allocation, to deal with this market phase, investors could consider overweight in their wallets a lot Europe how much i Emerging countries. “It is true that Italian savers usually have a predilection for domestic activities, especially bonds, but we believe it is possible to optimize wallets with one greater diversification Towards these two areas of the world “, explain the Pictet experts, recalling the investment strategy Pictet-Multi Asset Global Opportunities (magician).
