Europe

After a welcome boost from the Olympics, the UK ended 2012 on a disappointing note, contracting by 0.3% in Q4. We expect the UK economy will return to positive, if weak growth in 2013. While a fresh approach to monetary policy offers hope, unless banks can be encouraged to write down their bad debts, and [...]

If you’re thinking of investing in European stocks this year, you might want to direct your attention to the UK, France, Germany and Switzerland: the region’s largest countries by market cap are where companies are likely to post the biggest gains in earnings. Although Ireland also looks appealing on the surface, there is execution risk, [...]

Nonperforming loans at Spanish banks continued to rise in November, reaching a record high of €192bn, or 11.4% of all outstanding loans. Spanish lenders have faced the dual threat of slumping house prices and widespread unemployment. With joblessness set to rise further this year, they would be wise to brace themselves for a further increase [...]

US policymakers remain at loggerheads in attempting to find a resolution to the fiscal cliff. According to Fathom Consulting’s Global Economic Strategic Allocation Model (GESAM) the US would be plunged back into recession in 2013 if the fiscal cliff were to be enacted in full. Under current law a set of automatic tax hikes and [...]

Carrefour is making a determined effort to salvage its important domestic operations in France by selling non-core assets abroad and cutting prices, but lower margins and Europe’s economic headwinds may make it impossible for the company to boost profitability. The recent announcement by Tesco PLC (TSCO.L) that it plans to exit the U.S. supermarket business [...]

S&P 500 companies are seeking growth overseas, a strategy that has had mixed results of late and one that investors must monitor closely in order to understand the risk it may create for their portfolio. Since corporate earnings began to recover from the financial crisis in mid-2009, companies in the S&P 500 index have reported [...]

Among those hardest-hit by the eurozone’s fiscal problems and economic woes are the engineering companies that rely on capital investment and infrastructure upgrades for their revenues and profits. Among them is Strabag SE (STRV.VI), an Austrian construction and civil engineering company that warned investors of a dismal outlook when it reported its third-quarter results at [...]

The ECB will become the single supervisor for the eurozone’s biggest lenders, but boosting investor confidence likely will require more aggressive measures. Refresh Chart   Edit Chart As part of their efforts to instil confidence in the continent’s banking system, European leaders agreed a deal to make the European Central Bank (ECB) a single supervisor [...]

This research note is provided courtesy of Fathom Consulting. All of the charts below are available in the Chartbook via Datastream. For more information on Fathom Consulting, or to trial our services, please visit us at www.fathom-consulting.com A number of prominent Central Bankers seem to be falling out of love with inflation targeting. On Tuesday, [...]

Despite Europe’s economic plight, Michelin (MICP PA) is seeing its margins improve thanks to the combination of stronger international demand and lower commodity costs, all of which adds up to an improved earnings forecast. In the same way that reviewers dole out stars to top eateries in Michelin’s eponymous guidebooks, leading financial analysts are scrutinizing [...]