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Profiling the recovery?

Europe Insights - May 2020
25 May 2020
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    Europe: profiling the recovery?

    • There seems to be a consensus for using the Recovery Fund as an opportunity to modernize the European economy, along several areas, such as (1) Climate protection (2) Broad-based digitalization (3) Integrity of supply chains, especially the pharmaceutical and food sectors (4) Support the reorganization of the hardest hit sectors, such as automobile or airlines, but also tourism and leisure
    • InvestEU is expected to mobilize at least EUR650 billion in additional investment between 2021 and 2027
    • On 18 May, German and French leaders called for a coordinated fiscal response totaling EUR500 billion (3.6 per cent of EU GDP): this is a big step towards recognizing that fiscal transfers will be needed to alleviate national balance sheets

    European Equity. Dissecting sectors’ valuation anomalies vs US

    • The S&P500 is approaching its 2nd all-time valuation high as earnings evaporate and the market recovers lost ground. Europe trades at a steep discount to the US market: -47.2 per cent on a price to book level and the price tag for US companies are truly more expensive no matter what the sector, even in areas where Europe dominates

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