Europe’s Cheap Stocks Set For A Long Catch-up Rally

The boat carrying an estimated 500 men, women, and children, mainly from Eritrea and Somalia, was traveling from the Libyan coast when the fire broke out at dawn near Lampedusa, an island just 86 miles from Tunisia . RECOMMENDED: Think you know Europe? Take our geography quiz. As the fire raged, terrified migrants rushed to one side of the 65 foot-long boat, causing it to capsize about half a nautical mile off the islands coast, officials said. The Italian coast guard rescued about 150 people but another 250 were still missing hours after the disaster happened, said Antonio Candela, a government health commissioner. Italian television showed recovered bodies lined up along the quayside of the islands tiny port. More than 90 bodies had been recovered by midday Thursday, according to Angelino Alfano, a deputy prime minister. “It’s horrific, like a cemetery. They are still bringing them out,” said Giusi Nicolini, Lampedusas mayor. We dont have space for all the bodies theres no room to bury them. Its a dreadful tragedy. How many more tragedies like this have to happen before concrete measures are taken to prevent them? Ms. Nicolini said. Italian police arrested a Tunisian man who came ashore with the survivors on suspicion of being one of the human traffickers who had arranged the passage. He was reportedly identified as a smuggler by the other passengers, according to Nicolini.

Playing fourball, the Italian won three of the final seven holes for Europe to earn a draw for his side. The hot streak finished at 18, where he carded a birdie to square up the match. It was a clutch run for a player who endured an up-and-down season. His ability to step up when it mattered is a testament to his experience in these type of environments. Whether it’s the Ryder Cup or the Seve Trophy, he’s been a yearly fixture for Europe and all those high-pressure matches are starting to pay off. Nicolas Colsaerts Stuart Franklin/Getty Images Colsaerts is a perfect player for team competition. Europe can pair the big-hitting Belgian with a more conservative player, as it did with Gonzalo Fernandez-Castano, and let him take some chances knowing his partner can make up for any mistakes. After Day 1, which team is your Seve Trophy pick? Continental Europe 0.0% Total votes: 1 The plan worked out perfectly as Colsaerts won four holes en route to a 5-and-3 victory for Europe. He closed out the match with an eagle on No. 15, illustrating that aggressive style that can be a flaw during normal stoke-play events. His performance on the opening day should provide him with a boatload of confidence.

Seve Trophy 2013: Day 1 Stars Who Will Help Continental Europe End Drought

There are no comments yet. Get the conversation started by leaving the first comment

The main disappointment in Europe was Spain, where a rise in business activity during August – the first in more than two years – proved short-lived as firms slipped back into decline. Still, the data pointed to a broadening recovery across the euro zone, said Nick Matthews, senior European economist at Nomura, though that had yet to be borne out in official data. “The hard data so far for the third quarter has perhaps a bit more on the disappointing side – in particular industrial production …was very weak in July,” said Matthews. “We expect this to bounce back, but this suggests we could see a slightly slower pace of growth in the third quarter relative to the second quarter.” PMI compiler Markit said its surveys suggested the euro zone economy grew around 0.2 percent from July through September, a touch below the 0.3 percent registered in the second quarter. Nomura’s Matthews said they suggested a slightly stronger rate of growth for the final months of the year. STILL NOT ON SOLID GROUND Markit’s Eurozone Services PMI rose to 52.2 in September from August’s 50.7, little changed from a preliminary reading of 52.1. Readings above 50 signify growth. Businesses in No.1 economy Germany reported rising new orders and staffing levels, while France’s private sector grew for the first time in a year and a half. The upbeat mood was further bolstered by news that euro zone retail sales jumped 0.7 percent in August, month-on-month, hitting the top end of forecasts. Draghi said on Wednesday the euro zone economy still faced downside risks. Chris Williamson, Markit’s chief economist, said the surveys pointed to slightly stronger growth towards the end of this year, even if the region was not out of the woods. “The political instability that has reared up in Italy is a reminder that there remains plenty of scope for recoveries to be derailed,” said Williamson. Italian Prime Minister Enrico Letta won a confidence vote in parliament on Wednesday after Silvio Berlusconi, facing revolt in his own party, backtracked on threats to bring down the government.

Europe’s tentative recovery spreads south in September

It took five years to kill that view and it’s going to take years for it to come back.” In 2011, the only other time in the past decade when the price/earnings gap between growth and value was as wide as it is now, the broad market retreat started around three months after that gap began to close. That could be an indicator of when the broader market rally may run out of steam this time although not necessarily. In 2000 the gap between growth and value stocks was narrow yet the overall market downturn did not begin until around five months after the gap began to close. In the past five years the MSCI Europe Value Index has underperformed growth by nearly a quarter, in the run-up to the 2000 market peak, the gap between the two was less than 5 percentage points. SMALLER POOL In the current market rally – European stocks rose in 14 of the last 16 months and the STOXX Europe 600 index is up by around a third in that time, trading near five-year highs – the pool of obviously cheap, “deep value” stocks for investors to choose from has already contracted. The number of STOXX Europe 600 companies trading below their 10-year average price/earnings ratio has halved to around 270 over the past two years. On the flip side, investors’ aversion to companies exposed to the economic cycle during recent years has left many well-established companies with healthy balance sheets trading at lower valuations than the overall market. In these cases, the distinction between value and quality stocks has been blurred. “The opportunity is not so much in deep value but in relative valuation within the European equity space, where you have a lot of cheap cyclicals that you can invest in and benefit from the cyclical upturn,” said Manu Vandenbulck, senior investment manager at ING Investment Management. On a sector basis, energy and financials – the biggest weights within the MSCI Europe Value index – look the cheapest, followed by utilities and consumer discretionary shares. Investors, though, are using additional criteria to filter stocks that are cheap for good reason from those that may be unjustly discounted. ING Investment Management looks at sustainability of dividend payments, for example, while JPMorgan prefers firms well placed to ride Europe’s economic recovery.

Comments are closed.