Initial blog post May 19th : http://www.investorid.one/2017/05/19/political-crisis-in-brazil-again-market-moves-overdone-buying-opportunities/
Triple Top forming and pending reversal.
RSI & MACD divergences & ADX showing bearish signs.
25% profit booking : Purely Tactical = We remain Positive on Brazil & EM in general for the long term.
Link to slides below text.
FT has strong view on european equities…
- Private consumption led recovery (Slide 10) i.e more potential on the export side if EUR weakens.
From big budget deficit in peripheral countries to surplus since 2010 for the most (Except Spain) (Slide 12).
European growth better relative to US in 2016. (Slide 17).
SEK = Opportunity relative to EURO (Slide 18) : Risksbank to hike rates sooner tha later EUR-SEK spread to go down.
Earnings in Europe at crisis low (2010) !!! Not the case for US .. (Slide 20). Momentum improving for EM earnings.
European recovery well established : Unemployment at lows / IFO / Manufacturing PMI / GDP (Slide 21)
Support for EURO improving vs 2016 amongst Member states (Slide 22)
Huge potential recovery for european corporate earnings still 46% below pre-crisis peak….(Slide 23)
… & at all time lows as % of MSCI World. (Slide 24)
European Corporates sales recovery … earnings not yet … Margins will improve once we have more inflation. (Slide 25)
P/B at 1.8 in the lower range for last 20 years. (Slide 27)
Normalised PE at 18.50 cheaper vs US / DM / 30Y average of 21.50. (Slide 28)
Headwinds & Tailwinds for next 12m. (Slide 33)
Templeton EUROLAND Equities fund is already in our « Best in class « Funds list”
… and on EM equities.
- GDP/Capita : Huge room for growth !!! (Slide 36)
EM GDP( and trade) in % vs World more than doubled in 20 years .. just the beginning.. (Slide 37)
EM demography = ++++ (Slide 38)
Internet usage : Amongst the top 10 countries, 5 are EM . (Slide 39)
EM Ccies Index … 22% lower compared to 2002 and 24% lower than 2009 at bottom in 2016 // Today still nearly 40% lower to 2011 top. (Slide 44)
EM equities trading at discount vs DM .. PE 12.40 vs 16.50 , PB 1.8 vs 2.3 with higher earnings growth 14.4% vs 10.40% and higher margins. (Slide 45)
EM increasing Tech domination : (Slides 49 and follow.)
EM fundamentals sounder than DM : Banking system , Public & corporate debt , cap to asset ratio. (Slide 54 and follow)
EM key issues : Fed / US stimulus policy/ USD / Korea / China adjustments .
Templeton Emerging Markets Equities fund : Last 2 years performance was very good mainly since Manager change back in 2014 .