Equities

Since the last committee on March 11th, European markets have fallen sharply, due to Donald Trump’s announcements regarding US tariffs on April 2nd.

According to the Institute for Economics & Peace, there are 56 active conflicts in the world, the greatest number since the end of World War II. Increasingly complex geopolitics and ReArm Europe are keeping investors on our toes, analytically.

“Uncertainty” was probably the most important driver behind the stock market’s behaviour over the past four weeks.

In January, European equities closed the month higher, outperforming the US and narrowing part of the valuation gap between the two sides of the Atlantic. In addition to attractive valuation multiples, the eurozone has benefited from improving macro data (the composite PMI edged into expansionary territory at 50.2 in January and retail sales have risen for five consecutive months) and the ongoing rate-cutting cycle from the European Central Bank (ECB), while the Fed has decided to pause rate cuts.

Since the US presidential elections, US equities have been on an uptrend driven by a certain optimism, as the expectation of tax cuts and deregulation have fuelled the hope of accelerated corporate earnings growth.

European equity markets ended the last month of the year on a positive note. The positive market trend was mainly driven by rate cuts and slowing inflation over the course of 2024.

In November, European equities closed the month up. Excluding the UK, however, European equities fell marginally due to a combination of concerns about US trade policy and earnings warnings from the automotive and consumer goods sectors. Consumer weakness in China and within domestic markets was cited as the cause in both cases. A strong Financials performance supported UK equities (+2.5%).

In October, European equities closed the month lower. European headline inflation was revised down to 1.7% year-on-year in September (from the preliminary 1.8%).

Despite weak macroeconomic data (notably from Germany), European equities remained broadly flat in September, thanks to the announcement of the stimulus plan in China. However, Europe has faced the highest outflows since March 2022, to the benefit of emerging markets.

Chinese authorities have begun addressing deflationary pressures through a series of monetary and fiscal measures, signaling their growing urgency to stabilise the economy.

In August, European equities closed the month a bit higher despite some volatility.

Global equity markets reached a new all-time high in June, driven once again by the impressive performance of Technology in the US.

In a world grappling with escalating water issues, prioritizing water as a strategic business imperative has never been more critical. The operational and financial impacts of water-related risks have started materializing. Our conviction is that companies must consider and manage water as the long-term strategic and operational risk it can represent.

With young populations, technological innovation and a focus on sustainability, emerging markets excluding China may offer a lower-risk alternative and better diversification for those investors seeking growth.

European economic growth is somewhat stronger than expected, but still well behind US economic growth. In the eurozone, the European Central Bank (ECB) is more confident about the economy’s disinflationary path, with wage growth continuing to moderate despite the recovery in activity.

While investors are encouraged to consider climate change in their portfolios, to meet regulatory requirements and mitigate climate-related risks, a number of questions remain.

After a correction of 25% between November 2021 and October 2023, European small caps are now trading at lower valuations than large caps, both in terms of discounted cash flows and earnings multiples, which is a historical anomaly.

PFAS have been widely used for decades due to their unique properties in various domestic and industrial applications. They are resistant to water and virtually indestructible. They are also seen as the poison of the century. Where do we stand in terms of regulation? What are the PFAS-related risks? Where are the opportunities?

Global stock markets had a tough time in April, after a stellar performance in the first quarter of 2024. Worse than expected inflation numbers in the US, coupled with a resilient consumer, make a rate cut from the FED very unlikely anytime soon.

Global stock markets ended Q1 at an all-time high, fuelled by continued investor optimism. The resilience of the global economy, particularly in the US, has pleasantly surprised many.

On April 13, Iran decided to strike Israel with 300 drones and missiles following an attack on its diplomatic compound in Syria. Regional escalation and oil price are at risk. This tail risk cannot be ignored. We are closely monitoring the unfolding situation.

Japanese equities have enjoyed a positive run since the start of the year (+20.8% performance to 27 Mar 2024 ), with the Nikkei recently hitting all-time highs, surpassing the peak of the 1989 bubble .

More and more investors are turning to thematic strategies to increase their overall diversification. Johan Van Der Biest, Co-Head of Thematic Global Equity, and Allan Foll, Fund Manager, explain that thematic investment skills combined with solid financial analysis is a prerequisite for identifying high-tech companies with strong growth potential at reasonable prices.

Global equity markets steamed ahead, after a hesitant start of the year.

The impact of the 2024 elections on the decarbonization theme is of paramount importance, considering that the year marks a significant electoral period globally with 64 countries and the European Union - representing nearly half of the global population - heading to the polls.