We continue to advise an overweight to Eurozone equities versus US equivalents given attractive relative valuations, greater potential for earnings growth, and tailwinds from the improving macro environment Eurozone equities have performed strongly year-to-date but may have more room to run given valuations and weaker medium-term performance. UK equities have similar valuations but are less…
Many factors contributed to the global financial crisis, but an excessively high level of indebtedness built up over many years was a crucial one. Although the crisis first blew up in the US housing and mortgage markets, the receding tide of liquidity revealed many other exposed debtors, especially within the Eurozone. In the aftermath of…
Our biannual report summarizes asset allocation and total investment performance for 26 of Cambridge Associates’ UK foundation and endowment clients.
European Economics: Core of the Matter Christel Aranda-Hassel, Mirco Bulega, Neville Hill, Sonali Punhani, and Giovanni Zanni, Credit Suisse, February 27, 2015 European inflation has consistently disappointed since mid-2013. Credit Suisse believes the Eurozone is not experiencing deflation given the decline in prices is not broad-based, inflation expectations are picking up, and the European Central Bank…
Fasten Your Greek Belts Christel Aranda-Hassel et al., Credit Suisse, February 2, 2015 The rise of Syriza in Greece has turned the market’s attention once again to the possibility of the country leaving the Eurozone. The European economics team at Credit Suisse contends that it is in the best interest of both Greece and Europe…
The European Central Bank’s (ECB’s) recently announced QE package—wherein the bank will buy €60 billion of public and private securities a month through at least September 2016—was widely anticipated, and as such much of the impact on markets had transpired long before Thursday. While the announcement does represent a watershed moment given the ECB is…
Claims that Europe is becoming the next Japan have grown louder in recent months, after Eurozone GDP growth flat-lined in the second quarter and consumer prices increased just 0.4%, the lowest level in nearly five years. Clear parallels do exist between the current Eurozone macroeconomic environment and that which started to take shape in Japan…
Given that credit creation is the raison d’être of modern central bankers, the fact that European bank lending remains anemic despite a plethora of new measures from the European Central Bank (ECB) seems to us substantial cause for concern. The ECB’s pronouncements and alphabet soup of new programs have been remarkably effective at bringing down…
We maintain our advice to overweight European equities and underweight European bonds Macro data in Europe are slowly improving, but growth outside the Eurozone has been much stronger; corporate profits have also been lackluster but growth and/or cheaper currencies would help. European equity valuations are reasonable and reflect these weaknesses; they are attractive relative to…
European Equities: Time to Focus on the Micro European equities trade near a record historical discount to U.S. equities; potential for a turnaround in earnings and improving macro conditions further bolster the case for an overweight position. Europe has faded from the headlines in 2013 as Federal Reserve tapering, Abenomics in Japan, and a slowdown…