According to a Reuters survey of fund managers, strategists and brokers in London / Milan-23, uncertainties about the pandemic of COVID-19 helped restore corporate profits, with European equities hitting record highs in 2022. Has not pushed down the prospect of recording.
Polls conducted over the past two weeks predict that Germany’s DAX and France’s CAC 40 Best Equity Index will reach unknown highs by mid-2022, rising about 8% and 6%, respectively, from Monday’s closing prices. bottom.
According to polls on November 15-30, the Pan-European STOXX 600 rose 7% to reach 500 points by July, 10 points above the November 17 lifetime peak hit.
Concerns over the effects of the new coronavirus mutant have triggered widespread sales of European stocks on Friday, down 3.7%, but still up about 17% since the beginning of the year.
The strong recovery of profits from the recession caused by the 2020 blockade is behind this year’s strong performance.
According to the latest Refinitiv I / B / E / S data, profits surged 58.8% in the third quarter earnings season after a 96.4% and 152.6% surge in the first two quarters.
Philip Suisse’s Chief Global Strategist, Philippe Richibach, said:
He expected a higher single-digit equity return in 2022 compared to a double-digit return in 2021.
However, the resurgence of the pandemic in Europe and the announcement of new social restrictions in Austria and elsewhere have demoralized.
Headwind
Economic conditions in the euro area eased in November amid consumer concerns about the fourth wave of coronavirus. Meanwhile, Germany’s business morals deteriorated for the fifth straight month in November as supply bottlenecks hit manufacturing.
“Europe’s headwinds are rising sharply due to rising energy prices, rising infectious diseases and delayed deliveries. This creates short-term uncertainty, but the situation should ease next year.” Tomas Hildebrandt, Senior Portfolio Manager at Evli Bank in Helsinki, said.
Most analysts continue to have a positive outlook, but some analysts predict a tough year for equities.
Stephane Ekolo, a strategist at brokerage firm Tradition, estimates that the STOXX 600 will lose about 30 to 430 points by the end of 2022 as economic growth slows.
“Corporate profits are likely to deteriorate in the next six months as supply chain turmoil continues, boost declines resume, potential regulatory risks and rising real interest rates. I think, “says Ekolo.
Among the risks cited by poll respondents was the surge in inflation, which forced the European Central Bank to accelerate cuts in monetary stimulus.
Consumer prices in Germany rose 4.6% in October and then 6% year-on-year, increasing pressure to respond to the ECB.
However, rising interest rates have already risen 28% this year, as rising interest rates could boost European banks and usually thrive when interest rate expectations rise.
follow