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Laven Cao, CFA
Laven Cao, CFA
Prospect of further ECB rate hikes reinforces our downgrade of European equities
Synopsis: The ECB’s first rate hike since 2023 reinforces our Unattractive view on European equities, as renewed inflation pressure is forcing tighter policy just as growth weakens, although selective opportunities remain in European defence and power infrastructure.
Europe downgraded to unattractive: The energy shock is not over, and earnings are likely to show it
Synopsis: We downgrade European equities to Unattractive - 2.0 Stars as higher-for-longer energy prices raise stagflation and earnings risks, while Europe’s remaining opportunities are increasingly concentrated in selective themes such as defence, power infrastructure and electrification.
The energy security trade the market has not priced yet
GRID captures the structural upgrade cycle in power infrastructure as the Hormuz closure, AI data centre demand and electrification permanently alter the economics of domestic energy.
SAP: Why AI may strengthen, not erode, its moat
SAP’s 1Q26 results suggest its cloud transition remains intact, while AI may strengthen rather than weaken its moat by increasing the value of trusted enterprise data and workflow systems.
European Defence: Backlog growth supports a multi-year earnings cycle
European defence stocks have pulled back over 11% — but backlogs are building, margins are expanding, and company earnings are starting to confirm what policy has been signalling for months.
Europe downgraded to Neutral: Macro headwinds rise, but selective opportunities remain
Europe faces near-term macro headwinds, but selective sectors still benefit from a structural defence and infrastructure spending cycle.
Tired of market swings? Consider a strategy that looks beyond direction
A market-neutral strategy like the Jupiter GEAR offers a differentiated, low-correlation return stream that can improve portfolio resilience, particularly in environments where traditional diversification is less effective.
European equities: structural case remains intact amid Iran conflict
Geopolitical tensions from the Iran conflict have triggered near-term volatility in European equities, but the region’s improving profitability profile and rising strategic relevance suggest the structural investment case remains intact.
European small caps: Positioned for domestic recovery and rate tailwinds
European small caps offer an opportunity to capture domestic recovery, rate-cut tailwinds, and a “double discount” valuation gap versus both global markets and European large caps.
SAP: A rare buy opportunity created by the SaaS sell-off
Fears of AI disruption have triggered a broad SaaS sell-off – but what if SAP is actually one of the biggest beneficiaries?
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