Live Markets: Room for optimism over EU/UK exporters - Barclays

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04/10/2024 12:16

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    ROOM FOR OPTIMISM OVER EU/UK EXPORTERS - BARCLAYS
    Barclays equity strategists see some relief ahead for EU and UK exporters, but a complex
geopolitical backdrop means it won't be smooth sailing. 
    Recent weakness in the U.S. dollar has boosted the British pound and the euro, which are
teetering around two-year highs, a factor helping domestically oriented stocks in the region to
outperform even amid lacklustre growth, Barclays says.
    "However, in the past week we have seen news flow regarding potentially higher corporate
taxes in France and Italy, as both economies struggle with weak fiscal positions," they add. 
    They think this could disproportionately hit earnings for the most domestically tilted
stocks. 
    "At the same time, if dollar were to stabilise, as discussed above, that could end up
providing relief to exporters in Europe."
    More China stimulus could help growth too. Tech, chemicals, cap goods, miners, luxury and
autos stand out as potential beneficiaries according to Barclays, all export/China tilted
sectors. 
    "It's not going to be smooth sailing though as the likelihood of potential tariffs
implementation in the case of Trump second term would be a major headwind to export tilted
names," they warn. 
    Potential escalation in the Middle East and higher oil prices are another risk. 

    (Lucy Raitano)
    *****
    
    FOR FRIDAY'S OTHER LIVE MARKETS POSTS
    MARKETS "OBSESSING" OVER JOBS DATA CLICK HERE
    FRANCE AND ITALY TARGET COMPANIES TO SHRINK DEFICIT: WHAT IT MEANS CLICK HERE
    STOXX IN POSITIVE TERRITORY AS REAL ESTATE AND OIL JUMP CLICK HERE
    EUROPE MARKETS HEAD FOR MIXED START; MIDDLE EAST IN FOCUS CLICK HERE
    MIDDLE EAST TENSIONS DRIVE OIL PRICES CLICK HERE

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Oil price wary amid prospects of war escalation    https://reut.rs/3zM4k0O
Rising unemployment, rising risk    https://reut.rs/4dvNtxQ
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