25 November 2019
European companies posted net positive surprises during the Q3 results season (albeit on reduced expectations). More favourable base effects and expectation of a modest uptick in global GDP growth next year, along with resilient profit margins, have prompted expectations of mid-single digit EPS growth in 2020.
If analysts are correct, Q3 could mark the trough of the earnings soft patch. Europe’s relatively open economy has meant that the economic slowdown has been more pronounced than in other regions, but equally stands to benefit more on recovery. Optimism also comes from hopes for fiscal spending under the new leadership of the ECB.
After a year of trade wars, rate rises and more volatile markets, we see three big themes for equity markets in 2019.