Perspectives Blog

Quality milestone in the European recovery story

March 17, 2014

…conservative in its forecasts, said that it has enjoyed an “amazing” start to the year in Europe. In addition, Adecco, the staffing company, has reported that revenues in the fourth quarter of 2013 rose by 9% in Italy, 10% in Germany, 12% in Benelux and 7% in the UK. Interestingly France was flat, which shows that the strength of the recovery will be unequally distributed. However, from a low base, there is potential for European growth to catch-…

An improving outlook for European equities

Philip Dicken, Head of European Equities, Threadneedle International Ltd | October 18, 2013

…loser look. According to Eurostat, the 17 eurozone member states showed seasonally-adjusted growth of 0.3% quarter on quarter in Q2 2013, confirming that the bloc has exited recession. Significantly, Europe’s largest economy Germany saw growth of 0.7%, but France also performed well, registering a surprisingly strong figure of 0.5%. In Portugal, the economy grew for the first time in two and a half years – by as much as 1.1%. Meanwhile, Spain an…

European equities – Should investors care about periphery vs. core anymore?

Dan Ison, Portfolio Manager | January 13, 2014

…-like resurgence in interest for European equities with an interesting mix of winners and losers. The best performing markets (all returning more than 33% for the year) were Greece, Finland and Ireland. Of the larger markets, Germany, The Netherlands and Spain were the best performers while France, UK and Italy were the worst. Four years since the start of the Euro Crisis (Greece late 2009), can we finally stop worrying about the periphery versus…

Is Europe heading for Japanese-style deflation?

Martin Harvey, Fund Manager, Threadneedle International Ltd | August 4, 2014

…. The demographic consideration: The lack of population growth contributed in no small way to the demise of Japan’s growth potential and consequent stagnation. Europe faces some of the same problems as Japan, in particular in Germany where the working age population peaked in 1998. As populations subside, spare capacity naturally rises as aggregate demand is reduced, leaving a heavy deflationary influence. The headwind that this trend produces in…

Global market mid-year outlook

Mark Burgess, Chief Investment Officer, Threadneedle Investments | June 16, 2014

…e Q1 GDP data would suggest. All else equal, that should push bond yields higher, particularly if the Fed stops its QE program later this year. The outlook for eurozone bond markets is rather more difficult to call; certainly Germany and Spain appear to have positive growth momentum, which should put some upward pressure on yields if that momentum remains in train. By contrast, the growth outlook in countries such as Italy and France remains very…

Inflation — The usual suspects

Zach Pandl, Portfolio Manager and Strategist | August 11, 2014

…he eurozone as of Q1 2014 (the latest available observation in most cases). While there are a few caveats and special factors, inflation is generally higher in countries with smaller output gaps (e.g., Norway, New Zealand and Germany) and lower in countries with bigger output gaps (e.g., Cyprus, Greece, Ireland and Spain). These data are entirely consistent with the historical evidence that weakness in the real economy puts downward pressure on i…

Global Asset Allocation Outlook (as of February 24, 2014)

Columbia Management Global Asset Allocation Team, | March 10, 2014

…rom a modest underweight to neutral, but maintained an underweight to small caps given their elevated valuations in relation to large caps. European countries presented a slightly different picture with core economies such as Germany and France deteriorating, while those on the periphery of the continent improving. Overall, the eurozone declined somewhat on our scorecard as earnings growth weakened. Ever since the speech by European Central Bank…