JPMorgan har analyseret cykliske virksomheders indtjening i 2. kvartal i de største regioner på kloden og konstaterer, at faldene har været mindre i Europa og Japan end i USA, men langt større i Latinamerika og Mellemøsten. På baggrund af de store stimuli i primært Europa, mener banken, at investorerne (her tænker banken på amerikanske) gør klogt i at blive mere selektive og at satse mere på Europa og de nye økonomier i Asien. Dér er der chance for en bedre indtjeningsudvikling i 2021.
Thought of the week
As has been the case in the U.S., 2Q earnings fell very sharply in international
markets as COVID-19 induced shutdowns weighed heavily on corporate results.
As shown in this week’s chart, the regions with the biggest weighting in cyclical sectors have seen the biggest fall in earnings.
Cyclical sectors account for only 35% of the S&P 500’s market capitalization, while representing 50% or more of international markets.
So far, earnings in Europe and Japan are on track to fall by -31% and -26% y/y, respectively, in 2Q. In addition, cyclical regions of emerging markets are expected see much deeper contractions at -56% for EMEA and -72% for Latin America.
On the other hand, earnings in EM Asia are tracking positive growth of 7%, reflecting its more moderate weighting toward cyclicals and its advanced recovery relative to the rest of the world.
Overall, while cyclicality has led to a larger drop in international earnings in 2020, it should also drive a stronger bounce back in 2021.
In addition to a stronger cyclical bias, some foreign countries have achieved better control over the virus than the U.S. and, like the U.S., have provided broad fiscal support to their economies.
Combined with the potential for further U.S. dollar weakness, international markets might finally be at a better starting position as we enter a new
cycle.
Consequently, this may be a good moment for investors to consider some
international diversification by increasing their exposure to regions that can benefit from a potentially stronger economic revival, especially Europa and EM Asia.
