Latest news with #SharonBell
CNBC
21-07-2025
- Business
- CNBC
European small caps surged this year — and could have further to run, Goldman Sachs strategist says
European small-cap stocks have outperformed this year and are poised to continue their winning streak, according to a senior Goldman Sachs strategist. Speaking to CNBC's "Squawk Box Europe" on Thursday, Sharon Bell said a weak dollar and expectations of an improving regional economy were giving "a little bit of a kicker to small caps." "So small caps in Europe have outperformed this year, which is very different from the U.S. … [where] it's the mega caps that have done very well," she said. "Small caps tend to be more domestic — they tend to be euro earners in Europe, and the euro has done well. If you're a dollar earner, you're a big-cap international company. Translating that back into euros when the euro has been so strong [will have] been painful for you this year. So that's one reason small caps have done well." MSCI's Europe Small Cap Index, home to stocks from across the region including British real estate platform Rightmove and Swiss real estate firm PSP Swiss Property , has gained around 13% since the beginning of the year. The German SDAX index, comprised of 70 small cap companies, has gained close to 32% so far this year. In comparison, the pan-European Stoxx 600 is up 7.9% in the year to date, while the U.S. S & P 500 index has added around 7%. Bell also noted that part of small cap stocks' appeal right now is that they remain cheap relative to large and mega-cap companies. "The large caps [are] at all at all-time highs and extremely stretched in valuation terms," she told CNBC. "And of course, when you get a little bit cheaper versus the large caps, you become big targets. And we have seen a pick-up in M & A [which] I do think will continue to improve next year, and in the end, all small caps get bid up when you start seeing people's expectations for M & A improve." According to data from professional services giant PwC, global M & A volumes fell 9% year-on-year in the first half of 2025, but deal values were up by 15%. In the EMEA region, volumes and values were down 6% and 7%, respectively, compared to the first half of 2024. PwC attributed this largely to a drop in the number of megadeals in the U.K. compared with the previous year. Bell isn't alone in seeing opportunities among small European firms. Bank of America's July European Fund Manager Survey found that a net 44% of respondents expect small caps to outperform large caps over the next 12 months. The regional survey included responses from fund managers who collectively manage assets worth $172 billion. That view marks a massive pivot in position on small cap stocks. Just one month earlier, only 7% of fund managers told BoA they believed small caps would outperform. BoA strategists said in the report on the survey findings that there was currently "a clear preference for European cyclicals, value [and] small caps stocks." Christopher Hart, a fund manager at Boston Partners, told CNBC on Friday that, while he didn't disagree with the pro-small cap view "from an idiosyncratic perspective," it was important to take a considered approach to investing in the space. However, Hart — who manages Boston Partners' $274 million Global Equity Fund — did note that there was "a sweet spot" among small caps, with some smaller companies offering both value and a strong growth trajectory. He urged not to treat small-caps as one.
Bloomberg
14-07-2025
- Business
- Bloomberg
European Stocks Are Complacent on Tariffs, Says Goldman's Bell
The rally in European stocks suggests investors have been miscalculating the risks of US tariffs, according to Goldman Sachs Group Inc.'s Sharon Bell. 'There's a little bit of an element of the market being perhaps a little bit too complacent in the very near term on the risks around all of this,' Bell, Goldman's senior European equity strategist, said in a Bloomberg TV interview.
Bloomberg
14-07-2025
- Business
- Bloomberg
Goldman Sees Near-Term Complacency on Trump Tariff Risks
Goldman Sachs equity strategist Sharon Bell says there could be an element of complacency in markets in the near term on the risks surrounding US President Donald Trump's tariffs deadline. "If we're at Aug. 1 and nothing has happened, and the 30% arrives, then I think the market will be down between now and then," Bell says on Bloomberg Television. (Source: Bloomberg)
Yahoo
20-05-2025
- Business
- Yahoo
JPMorgan and Citi See European Stocks Blowing Past the US
(Bloomberg) -- Some Wall Street strategists are betting European stocks will enjoy their best performance relative to the US in at least two decades as the region's economic outlook improves. America, 'Nation of Porches' NJ Transit Train Engineers Strike, Disrupting Travel to NYC NJ Transit Makes Deal With Engineers, Ending Three-Day Strike NYC Commuters Brace for Chaos as NJ Transit Strike Looms The Stoxx Europe 600 Index is expected to end the year around 554 points, according to the average of 20 strategists polled by Bloomberg. JPMorgan Chase & Co. has one of the highest targets at 580, suggesting a record lead of 25 percentage points over the S&P 500 Index as the bank expects the US benchmark to slide. Citigroup Inc. predicts a 4% rally to 570 points, the biggest outperformance since 2005. Overall, the surveyed strategists see the Stoxx 600 index gaining about 1% from Friday's close as analysts dial back some of their pessimism around corporate earnings. 'If we have already moved past peak earnings uncertainty, this could set the stage for additional upside and potential multiple re-rating, especially among more beaten-up cyclical sectors,' Citigroup strategist Beata Manthey said. The outlook marks a turnaround from expectations coming into the year, when strategists were braced for European stocks to trail the US by a wide margin. But the benchmark has rallied as historic fiscal reform in Germany and resilient earnings attracted investors looking for an alternative to US assets caught up in the trade war. The Stoxx 600 gained 0.5% on Tuesday, while S&P 500 futures fell 0.3%. A Bank of America Corp. survey published a week ago found a net 35% of global fund managers are now overweight European stocks, while net exposure to the US has dwindled to the smallest in two years. MSCI Europe constituents posted a 5.3% increase in first-quarter earnings, far better than the 1.5% decline expected by analysts, according to data compiled by Bloomberg Intelligence. A Citigroup index also shows fewer analysts have downgraded European estimates in the past few weeks. In the US, strategists are far less optimistic about the market outlook. A separate poll by Bloomberg found forecasters expect the S&P 500 to end the year at an average of 6,001 points, roughly unchanged from Friday's close. To be sure, this year's 9.0% rally in the Stoxx 600 has raised worries about valuations. The benchmark now trades at about 14.6 times earnings, higher than the 20-year median of 13.5, according to data compiled by Bloomberg. But that's still lower than the S&P 500's price-to-earnings ratio of nearly 22. Goldman Sachs Group Inc. strategist Sharon Bell said she expects investors to continue reallocating to the region given the lower relative valuations and high concentration in the US. 'We also note that inflation should moderate further in Europe this year and there is a close relationship between lower inflation and higher average valuations,' she wrote in a recent note. Bloomberg's poll showed only six firms — Bank of America, Deka Bank, ING, Panmure Liberum, Societe Generale SA and TFS Derivatives — expect the Stoxx 600 to decline more than 2% from Friday's close. SocGen strategist Roland Kaloyan said he needs to see stronger earnings trends as well as a further reduction in tariff-related risks to bet on a rally in the Stoxx 600. His year-end target of 530 implies a 3.5% drop. 'The uncertainty surrounding tariffs further complicates the outlook, as many firms are reluctant to provide clear guidance, indicating that the full impact of these tariffs may not yet be captured in earnings forecasts,' Kaloyan said. Over at UBS Group AG, strategist Gerry Fowler said valuations have increased as expected amid forecasts of stronger economic growth over the next two years. 'For further gains, we must get through a period of regime uncertainty that will probably keep EPS growth at zero or modestly lower this year.' (Adds Tuesday trading in sixth paragraph.) Why Apple Still Hasn't Cracked AI Anthropic Is Trying to Win the AI Race Without Losing Its Soul Microsoft's CEO on How AI Will Remake Every Company, Including His Cartoon Network's Last Gasp DeepSeek's 'Tech Madman' Founder Is Threatening US Dominance in AI Race ©2025 Bloomberg L.P. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
20-05-2025
- Business
- Yahoo
JPMorgan, Citi See European Stocks Beating US by Most in Decades
(Bloomberg) -- Some Wall Street strategists are betting European stocks will enjoy their best performance relative to the US in at least two decades as the region's economic outlook improves. America, 'Nation of Porches' NJ Transit Train Engineers Strike, Disrupting Travel to NYC NJ Transit Makes Deal With Engineers, Ending Three-Day Strike NYC Commuters Brace for Chaos as NJ Transit Strike Looms The Stoxx Europe 600 Index is expected to end the year around 554 points, according to the average of 20 strategists polled by Bloomberg. That implies a gain of about 1% from Friday's close. JPMorgan Chase & Co. has one of the highest targets in the survey at 580, while Citigroup Inc. predicts a 4% rally to 570 points as analysts dial back some of their pessimism around corporate earnings. By contrast, both banks expect the US equity benchmark to slide through the rest of the year. The difference between JPMorgan's European and US targets suggests the Stoxx 600 will outperform the S&P 500 Index by 25 percentage points in 2025, the most on record, while Citi's projections would be the best since 2005. 'If we have already moved past peak earnings uncertainty, this could set the stage for additional upside and potential multiple re-rating, especially among more beaten-up cyclical sectors,' Citigroup strategist Beata Manthey said of European stocks. The outlook marks a turnaround from expectations coming into the year, when strategists were braced for European stocks to trail the US by a wide margin. But the benchmark has rallied as historic fiscal reform in Germany and resilient earnings attracted investors looking for an alternative to US assets caught up in the trade war. A Bank of America Corp. survey published a week ago found a net 35% of global fund managers are now overweight European stocks, while net exposure to the US has dwindled to the smallest in two years. MSCI Europe constituents posted a 5.3% increase in first-quarter earnings, far better than the 1.5% decline expected by analysts, according to data compiled by Bloomberg Intelligence. A Citigroup index also shows fewer analysts have downgraded European estimates in the past few weeks. In the US, strategists are far less optimistic about the market outlook. A separate poll by Bloomberg found forecasters expect the S&P 500 to end the year at an average of 6,001 points, roughly unchanged from Friday's close. To be sure, this year's 8.3% rally in the Stoxx 600 has raised worries about valuations. The benchmark now trades at about 14.6 times earnings, higher than the 20-year median of 13.5, according to data compiled by Bloomberg. But that's still lower than the S&P 500's price-to-earnings ratio of nearly 22. Goldman Sachs Group Inc. strategist Sharon Bell said she expects investors to continue reallocating to the region given the lower relative valuations and high concentration in the US. 'We also note that inflation should moderate further in Europe this year and there is a close relationship between lower inflation and higher average valuations,' she wrote in a recent note. Bloomberg's poll showed only six firms — Bank of America, Deka Bank, ING, Panmure Liberum, Societe Generale SA and TFS Derivatives — expect the Stoxx 600 to decline more than 2% from Friday's close. SocGen strategist Roland Kaloyan said he needs to see stronger earnings trends as well as a further reduction in tariff-related risks to bet on a rally in the Stoxx 600. His year-end target of 530 implies a 3.5% drop. 'The uncertainty surrounding tariffs further complicates the outlook, as many firms are reluctant to provide clear guidance, indicating that the full impact of these tariffs may not yet be captured in earnings forecasts,' Kaloyan said. Over at UBS Group AG, strategist Gerry Fowler said valuations have increased as expected amid forecasts of stronger economic growth over the next two years. 'For further gains, we must get through a period of regime uncertainty that will probably keep EPS growth at zero or modestly lower this year.' Why Apple Still Hasn't Cracked AI Anthropic Is Trying to Win the AI Race Without Losing Its Soul Microsoft's CEO on How AI Will Remake Every Company, Including His Cartoon Network's Last Gasp DeepSeek's 'Tech Madman' Founder Is Threatening US Dominance in AI Race ©2025 Bloomberg L.P. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
