This page has been archived and commenting is disabled.
JPMorgan's 5 Reasons To Sell USA & Buy Europe
JPMorgan Cazenove's global equity strategy group has decided enough is enough - the underperformance of the Eurozone is getting stretched (they note), and are upgrading Euro equity allocations to Overweight at the expense of an Underweight in US stocks. Here are the fives reasons why they made the shift...
1) Eurozone has posted an exceptionally poor performance ytd, lagging the US by 22% in USD terms. It is now trading at a lower price relative than the one recorded at the point of peak stress in ’12, when Eurozone breakup was almost the base case.
In contrast to record wide peripheral spreads seen in ‘12, these are nowadays well behaved, at a tight 130bp,
and financial CDS spreads are at a healthy 65bp.
2) Forward P/E relative of Eurozone has improved substantially. Eurozone traded at record expensive levels earlier in the year, but has moved to the cheap side of fair value now.
The longer-term metrics, such as Shiller P/E and P/B, remain supportive of Eurozone.
3) The level of Eurozone earnings relative to the US has never been as depressed as it is today.
The ROE differential between the two regions is at the top of its historical range, and it should start to normalise from here. We note that the EPS revisions in the US are not much better than those in Eurozone anymore – the gap is closing.
4) Eurozone M3 has been picking up since April and it tends to lead economic activity. The credit cycle appears to be bottoming out in the region – there is a clear 2nd derivative visible in Spain and Italy.
German loan growth has already turned outright positive.
Three quarters of all financing in Europe is done through banks, so the fact that stress tests are finally behind us should allow the banks to be more supportive of the economy. The takeup in December T-LTRO could be more favourable than the previous one. ECB balance sheet will expand by 35% from here, we expect, which is not negligible. In contrast, US money printing is done.
5) Falling Euro is a tailwind for growth, for exporters and for earnings. Our economists suggest a 10% move lower in the trade-weighted Euro should boost growth by 1% over a two-three year period.
* * *
We see this as a relative call, where we believe Eurozone is due a period of outperformance vs the US, but continue to expect US stocks to make new highs in absolute terms. We stay UW the UK and OW Japan in the global portfolio.
Source: JPMorgan Cazenove
»
- 14514 reads
- Printer-friendly version
- Send to friend
- advertisements -
Listen.
I want: "JPMorgan's 5 Reasons To Sell USA & Buy Russia and Asia!". It's the only way to make money trading.
Russia is an ascending power, while the US is a descending one.
1. JPM wishes to buy USA and sell Europe to its clients.
2. JPM wishes to buy USA and sell Europe to its clients.
3. JPM wishes to buy USA and sell Europe to its clients.
4. JPM wishes to buy USA and sell Europe to its clients.
5. JPM wishes to buy USA and sell Europe to its clients.
k my private banker is breaking my balls but she is cute and i want to be cheeky or try to wake her the f up.
top three. reasons jpmorgue are criminals...?
top three reasons the fed killed the market ?
top three reasons why we are fucked ?
Hey here is one for you JPM...
50 reasons Americans should shut you down and put you all behind bars..
I'll drink to that :)
Basically they're saying that they've done their buying and now want the sheep to buy-in and push the mkt higher. Proceed at your own risk.
Reason 6: "We need to offload our overpriced positions in the EU to suckers and fools"
"Listen. I want: "JPMorgan's 5 Reasons To Sell USA & Buy Russia and Asia!". It's the only way to make money trading."
Hey Tiny Dick Bangalore Equities, I made another 1% on the USDJPY today, so suck it. I'm sending kamikaze Abe a Christmas card this year.
And yes, I do think India has a fantastic growth story moving forward. But that is for the economy, not your country's very small penises.
Listen.
You sound like you are preoccupied with thoughts of peni. Peen-eye.
Please don't let "US" disturb you.
what' s the difference between us ?
let's start with the peenus
(Dr Dre and Ice Cube, end of the 90s)
Listen Douche.
Complete your thoughts and write them in complete sentences.
OK?
I don't do eBonics or zhBonics. Your "STREET" language is not my street language. Get it el-Douche?
egad
Selling Europe and hiding in US shares ahead of the dollar rally and further oil price falls is the only way forward. This is a lame piece by JPM.
Europe is on borrowed time.
Another reason to be long Europe: http://www.faz.net/aktuell/feuilleton/medien/tv-kritik/putin-wirbt-um-de...
"
Merkel mal im russischen TV?Ob er es für möglich halte, dass Angela Merkel oder Barack Obama im russischen Fernsehen auch einmal eine solche Möglichkeit für einen Auftritt bekämen wie Putin soeben in der ARD, wollte Günther Jauch dann noch von Hubert Seipel wissen. Der reagierte leider so verkniffen, wie er sich von Beginn an in der Runde gab (dem Sinn nach: Müssen Sie bei den Russen fragen). Es brauchte einen zweiten Anlauf, bis Seipel sagte: „Ich denke, Frau Merkel wäre ein gern gesehener Gast im russischen Fernsehen.“ Obama selbstverständlich nicht."
most of us speak english dude
some of don't just speak english, dude
Wtf did you try to say?
dumb fuck. Mistress of the Obvious.
It's German and the translation is:
Murkle's peripheral spread is tightening by the hour. They want to show this on Russian TV. Obama is about as welcome on Russian TV as an Arab at a Bar-Mitzvah.
if only the Sheeple were awake
Where would the fun be in that?
Let's just stick to what we pacticed "NOBODY COULD HAVE SEEN THIS COMMING!"
And as if on cue "Russia attacks." You really can't make this shit up.
It's not like Europe has been any friend of Ukraine either.
Sorry but while I agree the euro is heading south here that just says to me I'll be traveling in Europe paying with booze and cigarettes.
We don't smoke anymore and we have pretty strickt laws about travelling with large amounts of alcohol....
BUT HEY, YOU'RE AMERICAN, SO GO AHEAD!! MAYBE THEY'LLLET YOU SLIDE ON THAT ONE!
Better start in France, they love Americans :)
This post appears to assume that macro or other fundamental data have any correlation whatsoever with asset prices. Good luck "investing" on that basis.
Cazenove - that reminds me of some smooth- talking Brit on King World news couple of years ago - can't remember his name - claiming to be in the service of HM the Queen and having spent 50 years developing cyclical technical models. The stupid prick made predictions of the S&P and USDX that failed in a most spectacular fashion.
Robin Griffiths if my memory serves.
Aha right !! Good catch. Robin "Buy the Bovespa" Griffiths...
Is Europe still a hodgepodge of nations held together by a single currency and no authority to issue common debt? Yes?...... Then no thank you. I'll pass on that fuster-cluck. You can just hold on to your crappy paper morgue.
Jim Ricktards says BMW will be building factories on Lesbos financed by Chinese capital, paying workers 5€ per hour (paraphrased). Some of the debt will be paid off from taxes on those wages.
Translation: We're holding a bunch of crappy EU stocks we need to sell you suckers before they go completely down the toilet.
Bingo!
Just remember folks half of US multinationals revenue comes from a declining (euro) currency. Should do wonders for profits going forward. Then again who needs profits when drones will be delivering shit made in China to your front door.
yes, but since ZIRP allows US multinationals to fund massive stock buybacks, all the directors will still get their bonuses even though EU-based profits fall while the stock price goes up... ya follow?
Translations: "We banksters are just about finished pillaging and plundering the US, and are moving on to Europe. Move your investments accordingly."
An American, not US subject.
I wonder how much interest there is in guillotines in Europe?!
Of course it is not ethically ot morally right, but, sometimes I feel like people here think said pillaging started in 2009 when Zero Hedge. At least give some credit to the Medici family, who were among the first to elevate it to an art form...
You are correct, however, the Medici's are dead, and gone.
I am worried about the fate of the American country, and so really only focus on the time-frame since the selling of the DC US to the banksters occurred on December 23, 1913.
An American, not US subject.
My guillotine is also focused on the future.
this outlook of course should explain the v-shaped rocket blast to the green in the Dow today on no volume...
right?
5 Questions to ask before you buy.
1) Do the Russians need euros for loans? Does Asia, Africa, Americas?
2) Who is buying european products and how much are they growing their market share.
3) How many loans in euros does JPM have?
4) Who needs euros outside of finance?
5) Where is the demand for euros comeing from?
OR are you just trying to create demand for a currency no one wants or needs, outside of the eurozone and finance?
Maybe after the santa claus rally.
3) The level of Eurozone earnings relative to the US has never been as depressed as it is today.
Maybe they make fewer 'adjustments'.
Well this is obvious... QE is "finished" in the US, and just about to get started in EU, and Japan.. well... 150 JPY / USD should solve their problems right? . Central bank motto for 2015...keep them guessing...it's harder to hit a moving target.
JPM outta know since they deal with "bad guys" too
http://newworldorderg20.wordpress.com/2014/11/07/jpmorgans-deal-with-gazprom-cements-thier-relationship-of-course/
http://newworldorderg20.wordpress.com
JP Morgan:
"All Balls and No Brains"
- Abraham Lincoln
It seems to me that because Europe is energy-poor, the cost structure of European products is to an equal degree outside of European hands.
That would seem to be a substantial economic disadvantage. When you add in cultural balkanism and the Euro's inherent reinforcement of failure (automatically redistributes wealth from those who succeed to those who do not), and demographic problems, Europe is facing very great headwinds.
What Europe has in the asset collumn is a very long tradition of technological excellence and creativity.
Of course, Europe is not alone in those advantages. And some who share those advantages do not share the same disadvantages.
There's no way to generate real production, real growth...all these jackasses do is BET, with fake free "money" first on one thing, then on another...