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Euro Area

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European Auto Sector: A Value Trap

European auto stocks are cheap, but even if European carmakers can rise to the challenge created by Chinese EVs, shareholders will suffer.

European Investment Strategy by Mathieu Savary
Rebounding German Factory Orders: False Signal?
August brought some respite for German factories struggling with poor demand this year. After falling by 11.3% m/m in the prior month, German factory orders rebounded by 3.9% m/m in August – beating expectations of a 1.5% m/m increase. In particular, a…
Daily Insights
EU CBAM’s Inflationary Impacts
According to BCA Research’s Commodity & Energy Strategy service, the EU carbon tax – aka Carbon Border Adjustment Mechanism (CBAM) – launched Sunday will lead to higher inflation in the medium term (3-5 years out). If enacted, the CBAM will collect…
Daily Insights
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The EU’s CBAM: The Road to Hell Is Paved With Green Intentions

The EU’s transition to a carbon tax launched this week via its Carbon Border Adjustment Mechanics (CBAM) will lead to higher inflation in the medium term (3 – 5 years out), and will stoke consumer (i.e., voter) antipathy if it becomes effective in 2026. As a result, the tax will be watered down. Food and energy prices are particularly at risk, as imported fertilizers, and electricity-generation and -transmission components made from steel and aluminum are affected by the CBAM. We remain long oil, gas and metals equity exposure via the XOP, XME and COMT ETFs. We also remain long gold to hedge inflation.

Commodity & Energy Strategy
Mediterranean Bloc: From Foreign Borrowers To Surplus Nations
According to BCA Research’s European Investment Strategy service, the Mediterranean bloc’s move from current account deficit to current account surplus nations greatly limits the risk of a new sovereign debt crisis. A combination of reforms, fiscal rigor,…
Daily Insights
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EIS Special Series: PIGS Have Wings

Introducing our Special Series to assess where Portugal, Italy, Greece, and Spain stand today. Stay tuned for more.

European Investment Strategy by Jeremie Peloso
German Inflation Slows To 2-Year Low
German inflation delivered an optimistic signal about the disinflation trend on Thursday. The headline CPI EU harmonized index collapsed from 6.4% y/y to 4.3% y/y in September– its lowest level since September 2021 and slightly below expectations of 4.5%.…
Daily Insights
Ifo German Business Sentiment: Smaller-Than-Anticipated Deterioration
The message from the German Ifo is that although business sentiment continues to weaken, the pace of deterioration slowed in September and appears to be in the process of bottoming. The Business Climate Index’s marginal 0.1-point decline to 85.7 delivered…
Daily Insights
Overweight European Energy Stocks
According to BCA Research’s European Investment Strategy service, energy stocks are an appealing overweight as a hedge against oil supply cuts. For now, the earnings of the energy sector continue to lag that of the broad market. However, relative earnings…
Daily Insights
Focus On Three Sectors

European stocks and the euro continue to weaken; soon, they will test the bottom of their recent trading range. Which sectors can protect investors against this downdraft?

European Investment Strategy by Mathieu Savary

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