Double Dip Unlikely

- Rollover — "Recent falls in global economic lead indicators and analysts’ revision ratios have raised concerns of a double dip in the global economy. As a result, global equities fell 13% in 2Q10."
- Fears Overdone — "Our economists expect a sustained but uneven global recovery. A rollover in analysts’ net EPS revisions is normal for this point in the cycle. Fears of a global double-dip look overdone in our view."
- Global Equities Just 10x PE — "Cost-cutting and subsequent operational leverage means that we think bottom-up analysts’ forecasts of double-digit global EPS growth in 2011 are achievable. Global equities are currently trading on 10x 2011 EPS forecasts."
- Overweight Japan, UK and Emerging Markets — "Japan is our preferred recovery play. The UK looks cheap in our view, with decent earnings momentum. Premium economic growth means that we remain Overweight EM."
- Global Sector Strategy — "Our belief that double dip fears are overdone means that we Overweight the cyclical sectors where earnings momentum should remain healthy. We are Underweight defensive sectors."
Citigroup Global Equity Quarterly 20100706

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