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Please be advised that future verbal and written communications from the bank may be in English only. These communications may include, but are not limited to, account agreements, statements and disclosures, changes in terms or fees; or any servicing of your account.

Por favor, tenga en cuenta que es posible que las comunicaciones futuras del banco, ya sean verbales o escritas, sean únicamente en inglés. Estas comunicaciones podrían incluir, entre otras, contratos de cuentas, estados de cuenta y divulgaciones, así como cambios en términos o cargos o cualquier tipo de servicio para su cuenta.

Informamos que as futuras comunicações do banco, verbais e escritas, podem estar disponíveis apenas em inglês. Essas comunicações podem incluir, entre outras, acordos de conta, extratos de conta e divulgações, alterações aos termos ou tarifas, ou qualquer tipo de serviço pertinente à sua conta.

仅此通知,本行即日起发出的口头及书面通信可能将只提供英文版本。这些通信可能包括但不限于账户协议,账单和通知,条款或费用变更;或任何为您账户提供的服务。

Please be advised that future verbal and written communications from the bank may be in English only. These communications may include, but are not limited to, account agreements, statements and disclosures, changes in terms or fees; or any servicing of your account.

Por favor, tenga en cuenta que es posible que las comunicaciones futuras del banco, ya sean verbales o escritas, sean únicamente en inglés. Estas comunicaciones podrían incluir, entre otras, contratos de cuentas, estados de cuenta y divulgaciones, así como cambios en términos o cargos o cualquier tipo de servicio para su cuenta.

Informamos que as futuras comunicações do banco, verbais e escritas, podem estar disponíveis apenas em inglês. Essas comunicações podem incluir, entre outras, acordos de conta, extratos de conta e divulgações, alterações aos termos ou tarifas, ou qualquer tipo de serviço pertinente à sua conta.

仅此通知,本行即日起发出的口头及书面通信可能将只提供英文版本。这些通信可能包括但不限于账户协议,账单和通知,条款或费用变更;或任何为您账户提供的服务。

Buy-European-equities-now-UK-equities-later

Perspectives

Buy European equities now, UK equities later in 2020

Jeffrey Sacks

By Jeffrey Sacks

Head - EMEA Investment Strategy

September 7, 2020Posted InFixed Income, Investment Strategy and Equities

Europe and the UK continue to face challenging unlocking phases despite COVID-19 treatment progress. However, we do not expect the regional virus resurgences to result in new widespread and prolonged lockdowns.

 

Europe’s economic recovery is gathering momentum, which is also reflected in gradually improving market perception. The UK still faces headwinds, including important EU trade deal talks. Nevertheless, the UK’s outlook should look clearer by year-end.

 

Government financial support programs can extend further. France and Germany are currently supporting their economies aggressively, while the UK is likely to announce further measures in the autumn. 

 

Central banks are expected to remain very accommodative. We expect both the European Central Bank (ECB) and the Bank of England (BoE) to expand their asset purchase programmes in size and breadth.

 

While GDP recoveries are firmly underway, the high frequency data is losing some momentum and activity levels are still below normal levels. We expect corporate earnings will fall by over 40% this year, before rebounding by a similar amount next year.

 

We are slightly overweight European equities, neutral UK equities, with a preference for  ‘COVID-cyclicals’, value, and mid-caps. We are focused on companies with balance sheet strength and progressive dividend growth. 

 

European high yield corporate bonds have further to rally on a selective basis, underpinned by the increasingly challenging investor search for positive yield. 

 

Euro and Sterling have recently benefited from the broad US dollar weakness. The Euro is well supported by domestic drivers, Sterling now needs Brexit clarity.

 

The virus’s impact reinforces some of our recommendations from the start of the year. These include staying invested, diversifying sensibly, and embracing higher volatility. Our long-term “Unstoppable Trends” like fintech and cybersecurity still offer attractive equity potential. 

Read European Strategy Bulletin