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17 May 2013
Flash: European market outlook suggests uneven performance – Goldman Sachs
FXstreet.com (Barcelona) - In light of recent European rates and sectoral performance, “We downgrade food and beverages to an underweight (from neutral) and personal and household goods to a neutral.”
Moreover, “we remain overweight luxury goods as a sub sector, given more attractive valuations and more sensitivity to an improvement in global growth, especially in China. We initiate a recommendation to be long FTSE 100 versus the SMI on a currency hedged basis.” The team notes.
The Swiss market is expensive – on almost a peak premium versus the FTSE 100. And moreover we see the UK as more geared to an improvement in the global cycle and less vulnerable to a relative sell-off in consumer staples. The UK should also benefit from continued supportive monetary policy, which is already showing signs of helping boost the housing market.
Moreover, “we remain overweight luxury goods as a sub sector, given more attractive valuations and more sensitivity to an improvement in global growth, especially in China. We initiate a recommendation to be long FTSE 100 versus the SMI on a currency hedged basis.” The team notes.
The Swiss market is expensive – on almost a peak premium versus the FTSE 100. And moreover we see the UK as more geared to an improvement in the global cycle and less vulnerable to a relative sell-off in consumer staples. The UK should also benefit from continued supportive monetary policy, which is already showing signs of helping boost the housing market.