You are here: Home - Investing - Experienced Investor - News -

Outlook for Europe not dampened by ECB’s ‘disappointing’ actions

0
Written by: Adam Lewis
04/12/2015
Despite the European Central Bank disappointing markets with yesterday’s announcement of an extended Quantitative Easing programme and a cut in the deposit rate, the outlook for Europe remains positive says Axa Wealth’s head of investing Adrian Lowcock.

Yesterday’s announcement saw the €60bn a month QE programme extended a further six months till April 2017, while the deposit rate was reduced 10 basis points from -0.20% to -0.30%. Markets had been expecting a 20 basis point cut in the deposit rate, and at least €20bn added to the asset purchase programme.

Lowcock says: “Mario Draghi [pictured] has a reputation of giving markets more than they expected. This time though he disappointed. It was this disappointment that led to the over-reaction in markets yesterday. Many had hoped Draghi would surprise the markets with a shock and awe announcement.”

Despite this he adds the outlook for Europe remains positive, with business and consumer confidence rising and economic PMI (Purchasing Managers’ Index) data being resilient.

“Whilst the euro has initially strengthened against other currency’s it could quickly reverse if the US Fed announces its first interest rate rise in nine years on 16th December,” he says.

“European stocks continue to trade at a discount to their US peers, have superior earnings per share growth and benefit from lower interest rates.  At these levels the  European stock market looks attractive for long term investors.”

In terms of fund ideas in this current environment, Lowcock picks out John Bennett’s Henderson European Selected Opportunities fund, and James Sym’s Schroder European Alpha Income fund.

“Bennett pays close attention to the wider economic picture and sector trends,” says Lowcock. “He believes this is essential to get performance from Europeans large companies.  His focus is on companies which have a discount to their intrinsic value.

“Sym uses a business cycle approach taking into account the wider economic climate and market sentiment when picking individual stocks.  There is a tendency towards value stocks but this will vary with where Sym believes we are in the economic cycle. The cyclical stock picking strategy should benefit investors most in rising market and is designed to take the most advantage of the European recovery.”

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

The savings accounts paying the most interest

If one of your jobs this month is to get your finances in order, moving your savings to a higher paying deal i...

Coronavirus and your finances: what help can you get?

News and updates on everything to do with coronavirus and your personal finances.

Everything you need to know about being furloughed

If you’ve been ‘furloughed’ by your company, here’s what it means…

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week

Read previous post:
Japan and smaller companies lead the way in 2015

Funds investing in Japan have lead the way in terms of investment returns in 2015, while investors in Global Emerging...

Close