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Erste Group Research
Page
Global Market Trends S&P 500 | DAX
Bund | Gold | Silver
Zagreb, June11th 2014
Stephan Lingnau | Equity Analyst | Erste Group Research +43 50100 16574
Data as of 09.06.2014
10. Juni 2014 1
Erste Group Research 2
Economics
United States Outlook 2014
• Forecasting GDP growth of +2.5% in 2014 and +2.7% in 2015.
• Fed likely to continue gradual reduction of purchases by approx. USD 10bn per meeting
• The first rate hike is not to be expected before mid-2015.
• 10Y Treasury expected to increase to 3.0% by Dec. 2014. (current: 2.6%)
Erste Group Research 3
Economics
Eurozone Outlook 2014
• Forecasting moderate GDP growth of +1.1% in 2014 and +1.5% in 2015.
• Gradual 10Y Bund increase to 1.8% by Dec. 14 (current: 1.4%)
Erste Group Research 4
Economics
Global Growth Outlook 2014e & 2015e
GDP y/y
Source: IMF, Erste Group Research
Erste Group Research 5
Global Trends
Economic Cycle Signals Buy Equities
Source: Datastream, Erste Group Research
Global Economy Clock: IFO Index
Erste Group Research 6
Global Trends
Economic Cycle | Developed Markets
Source: Datastream, Erste Group Research
Economy Clock: IFO Index
Erste Group Research 7
Global Trends
Economic Cycle | Emerging Markets
Source: Datastream, Erste Group Research
Economy Clock: IFO Index
Erste Group Research
Trends Global
Performances: Equities, Bonds, Gold
Erste Group Research
VIX Index:
9
Global Trends
Volatility below long term average
Quelle: Datastream, Erste Group Research
Erste Group Research
Global Trends
Emerging Markets Currencies have stabilised
Source: Datastream, Erste Group Research
Emerging Markets Currencies vs USD
Erste Group Research 11
Global Trends
JPY vs. SPX correlation picked up again in Q2
Source: Datastream
12 months: S&P 500 and JPY/USD:
Erste Group Research 12
Trends Global
Deflationary Trend for Basic Resources ex. Softs
Source: Datastream, Erste Group Research
Basic Resource Indices indexed in USD
Erste Group Research 13
Source: Datastream Source: Datastream
US FED Total Assets vs. S&P 500 BOJ Total Assets vs. Nikkei 225
Global Trends
Central Bank Balance Sheet Expansion continues
Erste Group Research
Source: Datastream, Erste Group Research
14
Global Trends
Negative Economic Surprises outweigh
Global Economic Surprise Index vs. MSCI World
Erste Group Research 15
Global Trends
No euphoria for equities in the US (1)
Source: Datastream, Erste Group Research
AAII Sentiment Survey
Erste Group Research 16
Global Trends
No euphoria for equities in the US (2)
Source: Datastream, Erste Group Research
AAII Asset Allocation Survey
Erste Group Research 17
Trend United States
Expected Earnings growth in the US picking up
Source: Factset
S&P 500 EPS 2014e & 2015e
Erste Group Research
Trend Europe
Eurozone Banks correlate with Periphery-Yields
EuroStoxx Banks vs. Spanish and Italian 10Y Bonds (inverse)
Erste Group Research 19
Global Sectors
Overweight: Discretionary, Health Care, Industrials
Source: Datastream, Erste Group Research
Relative Strenght of Sektor-Indices vs. MSCI World:
Erste Group Research
Global Trends
2014e: EPS Growth in all Sectors positive
20
Source: Datastream, Erste Group Research
MSCI World AC expected EPS growth:
Sector MSCI AC World Weight % EPS y/y 14e Perf 3M
Materials 6 11% 2.8%
Industrials 11 11% 4.3%
Consumer Discr. 12 9% 1.0%
Consumer Staples 10 6% 7.4%
Technology 13 13% 4.5%
Telecom 4 -3% 6.4%
Health Care 11 9% 1.8%
Utilities 3 4% 8.0%
Energy 10 9% 10.2%
Financials 22 31% 5.5%
Erste Group Research
Global Trends
2014e: EPS Growth in all Regions positive
21
Source: Datastream, Erste Group Research
MSCI Indices expected EPS growth 2014:
Erste Group Research
EQUITIES
United States
22
S&P 500 at all-time high
Solid EPS growth of 8% and 11% (14e & 15e)
FED balance sheet expansion and weak USD support equities
Our technical volume indicators point to further increases
Share buy backs are an important factor for the performance
Erste Group Research
S&P 500
A heavy weight in Tech and Financials
23
2%
3%
3%
10%
10%
10%
13%
13%
16%
19%
0% 10% 20% 30%
Telecom
Utilities
Materials
Energy
Consumer Staples
Industrials
Consumer Discretionary
Health Care
Financials
Technology
Sectorweights S&P 500 Main Equities
Source: Bloomberg
1.3%
1.4%
1.4%
1.4%
1.5%
1.6%
1.8%
2.3%
2.4%
2.7%
0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0%
Chevron
Wal-Mart
Wells Fargo
GE
Johnson & J.
Berkshire
Microsoft
Exxon
Apple
Source: Bloomberg
Erste Group Research 24
US | Fundamental Outlook
All Sectors with EPS growth higher 5% expected
Source: Datastream
Sector EPS growth MSCI USA FY1 & FY2
Erste Group Research
Green: OBV 120 weeks.
Blue: OBV 40 weeks
Red: OBV 20 weeks (ls)
Actual situation: blue>red>green | positive and all indicators are above neutral zone of 50.
S&P 500
On-Balance volume of single stocks
Source: Erste Group Research
Erste Group Research
S&P 500
Volatility of single stocks
Source: Erste Group Research
Erste Group Research
S&P 500
Volume weighted average price (VWAP)
Source: Erste Group Research
Erste Group Research
S&P 500
Erste Group Research Technical Buy & Sell indicators
Source: Erste Group Research
Erste Group Research
EQUITIES
Western Europe
29
Solid EPS growth of 8% and 13% (14e & 15e)
EPS momentum is showing a slowing trend (as in prev. years)
Strong performance of southern markets (Italy & Spain)
Falling EPS: Telecom and Utilities
Strong growth: Technology, Discretionary and Industrials
Technically the upward trend is intact
Erste Group Research
Western Europe
Countries - MSCI Europe EPS growth 14e and 15e
Source: Datastream, Erste Group Research
EPS growth FY1 and FY2
Erste Group Research
Western Europe
Sectors - MSCI Europe EPS growth 14e and 15e
Source: Datastream, Erste Group Research
EPS growth FY1 and FY2
Erste Group Research 32
0%
4%
5%
5%
8%
12%
13%
14%
14%
25%
0% 5% 10% 15% 20% 25% 30%
Energy
Utilities
Consumer Staples
Telecom
Technology
Industrials
Materials
Health Care
Financials
Consumer Discretionary
DAX
Strong weighting in Discretionary
Index Sectorweights Weighting of Top Equities
Source: Bloomberg
3.5%
3.6%
4.3%
4.7%
7.0%
7.3%
7.7%
8.7%
9.7%
10.3%
0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0%
Linde
Volkswagen
Deutsche Bank
Dt. Telecom
SAP
Allianz
Daimler
BASF
Siemens
Bayer
Source: dax-indices.com
Erste Group Research
Green: OBV 120 weeks.
Blue: OBV 40 weeks
Red: OBV 20 weeks (ls)
Actual situation: blue>green>red | positive and all indicators are above neutral zone of 50.
DAX
On-Balance volume of single stocks
Source: Erste Group Research
Erste Group Research
Demography US vs. Europe
US- Equities long-term more attractive than Europe
Erste Group Research 35
Gold
43% Jewellery Demand, India & China main customers
Gold Demand in 2012:
Source: World Gold Council
Regional Demand for Gold in t:
Source: World Gold Council
Erste Group Research 36
Gold
Strong Seasonality in Q3 & Q4
Gold Price Seasonality
Source: Datastream, Erste Group Research
Source: Datastream, Erste Group Research
Erste Group Research 37
Gold
Consolidiating Formation
Source: Datastream, Erste Group Research
Gold Price in USD
Erste Group Research 38
Silver
50% an Industrial Metal
Source: Datastream, Erste Group Research
Long Term Silver Price in USD/oz
Source: The Silver Insitiute, Erste Group Research
Long Term Silver Price in USD/oz Global Silver Demand 2012:
Erste Group Research 39
Silver
The volatile Derivative of Gold
Source: Datastream, Erste Group Research
xxxxx
Q1
Source: Datastream, Erste Group Research
ShortTerm Silver & Gold Chart Long Term Silver & Gold Chart
Erste Group Research 40
Bund Future
We expect a downward trend
Bund Future vs Bund Yield 10Y Bund expected yield development
Source: Datastream, Erste Group Research
Erste Group Research
Thank you for your attention.
41
Erste Group Research 42
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