Latest news with #RBCWealthManagement
&w=3840&q=100)
Business Standard
4 days ago
- Business
- Business Standard
Europe stock markets stage world-beating rally as trade war backfires
By Sagarika Jaisinghani and Julien Ponthus Europe's equities have emerged clear winners worldwide as the region's economic outlook brightens at a time when President Donald Trump's trade war hobbles US financial markets. Five months into the year, eight of the world's 10 best-performing stock markets are in Europe, according to data compiled by Bloomberg. That list features Germany's DAX Index with a rally of more than 30% in dollar terms, as well as peripheral markets such as Slovenia, Poland, Greece and Hungary. The pan-European Stoxx 600 Index is beating the S&P 500 by a record 18 percentage points in dollars, powered by Germany's historic fiscal spending plans and a stronger euro. Market participants say there's more to come as resilient corporate earnings and attractive valuations make the region a safer bet when concern over trade and fiscal debt grips the US economy. 'Europe is back on the map,' said Frederique Carrier, head of investment strategy for RBC Wealth Management in the British Isles and Asia. 'We are getting more questions about Europe now over the last two months than we did over the last 10 years.' The outperformance, if it lasts, will mark a turnaround from years of sluggishness for European markets. And the rally may just feed on itself: As stocks on the continent rise, they're likely to attract fresh assets from around the world, equity bulls say. UBS Group AG analysts said in a recent note that investors' shift away from US assets will channel €1.2 trillion ($1.4 trillion) into Europe's stock market over the next five years. An early impetus for this year's gains came from the proposal by Berlin — famous for its fiscal austerity — to spend hundreds of billions of euros on infrastructure and defense. Citigroup Inc. economists expect the reform to boost growth across the euro area from the second half of 2026. On the other side of the Atlantic, investors are on recession watch again amid concerns around inflation and America's fiscal deficit. Sentiment toward Treasuries took a hit in May after Moody's Ratings stripped the US of its top credit grade, with bond yields also climbing in response to Trump's tax-cut proposals. And in a blow to the president's trade agenda, a US court has issued a rare rebuke blocking many of the import taxes he has threatened and imposed on key partners. A proposed tax measure is also raising alarm on Wall Street as it would increase tax rates for individuals and companies from countries with 'discriminatory' tax policies, potentially driving away foreign investors. The S&P 500 rebounded in May, but remains a laggard for the year. The index has gained only about 0.5% in 2025 compared with a 12% jump in the MSCI All-Country World Index excluding the US. It also ranks 73rd among the 92 indexes tracked by Bloomberg. Beata Manthey, head of European and global equity strategy at Citigroup, said the euro area is in 'a relatively good place' as the European Central Bank has room to reduce interest rates further, while equity valuations aren't stretched. 'Of course if there's a US recession, no market would go unscathed, but the lack of exuberance in Europe makes it more resilient to a deeper selloff,' Manthey said. 'Investors had shunned the region for so long that inflows are still tiny compared with outflows of the past few years.' Peripherals Winning A slate of Europe's smaller markets is dominating the leader boards this year. Slovenia's blue-chip SBI TOP Index is the world's second-best performing gauge with a rally of 42% in dollar terms, behind Ghana's benchmark. Poland's WIG20 Index has gained 40%, while benchmarks in Greece and Hungary are up more than 34% each. Strategists at Societe Generale SA have recommended peripheral European markets this year, citing a wider risk premium as well as relative political stability. The team continues to predict an outperformance as they expect sovereign bond yields to be more protected than in some of the big spenders such as France and Germany. Defense stocks have been among the biggest winners this year, with seven of the 10 best-performing stocks in the Stoxx 600 related to the sector. All have surged at least 90%, with German contractors Renk Group AG, Rheinmetall AG and Hensoldt AG leading the pack. Banks and insurance stocks have also outperformed in 2025. 'What's not to love about European equities?' said Florian Ielpo, head of macro research at Lombard Odier Investment Managers. 'In the US you're punished for taking risk, but in Europe you're rewarded for it. Inflation looks contained, and there's finally some visibility. In the US, you're still wondering what will happen tomorrow, what tweets will you see.' Earnings Optimism Corporate earnings have been a bright spot, with first-quarter profits at MSCI Europe companies rising 5.3% compared with expectations of a 1.5% decline, according to data compiled by Bloomberg Intelligence. While many executives tempered their outlooks given lingering trade uncertainties, fewer analysts have cut earnings estimates in the past weeks, suggesting the worst of the downgrades may be over. To be sure, the global trade outlook remains a key risk. A federal appeals court has offered Trump a temporary reprieve from the ruling threatening to throw out the bulk of his tariff agenda. The president also said he would be increasing levies on steel and aluminum to 50% from 25%. Many European industries including miners, automakers and luxury goods are heavily exposed to international markets for revenue. Analysts this year have reduced Stoxx 600 earnings estimates for the coming 12 months by about 1.4%, according to data compiled by Bloomberg. Some market forecasters still bet European stocks will race past their US peers, with the team at JPMorgan Chase & Co. calling for the biggest outperformance on record. On average, a Bloomberg survey of 20 strategists found the Stoxx 600 is expected to gain another 1% from current levels. 'For the first time in a really long time I do believe there's a chance that European stocks can outperform the US market,' said Francois Rimeu, a strategist at La Francaise Asset Management. 'Now for this outperformance trend to hold, earnings will need to show some real growth next year.'
Yahoo
4 days ago
- Business
- Yahoo
Europe stocks stage world-beating rally as trade war backfires
(Bloomberg) — Europe's equities have emerged clear winners worldwide as the region's economic outlook brightens at a time when President Donald Trump's trade war hobbles US financial markets. Billionaire Steve Cohen Wants NY to Expand Taxpayer-Backed Ferry Now With Colorful Blocks, Tirana's Pyramid Represents a Changing Albania Where the Wild Children's Museums Are The Economic Benefits of Paying Workers to Move NYC Congestion Toll Brings In $216 Million in First Four Months Five months into the year, eight of the world's 10 best-performing stock markets are in Europe, according to data compiled by Bloomberg. That list features Germany's DAX Index with a rally of more than 30% in dollar terms, as well as peripheral markets such as Slovenia, Poland, Greece and Hungary. The pan-European Stoxx 600 Index is beating the S&P 500 by a record 18 percentage points in dollars, powered by Germany's historic fiscal spending plans and a stronger euro. Market participants say there's more to come as resilient corporate earnings and attractive valuations make the region a safer bet when concern over trade and fiscal debt grips the US economy. 'Europe is back on the map,' said Frederique Carrier, head of investment strategy for RBC Wealth Management in the British Isles and Asia. 'We are getting more questions about Europe now over the last two months than we did over the last 10 years.' The outperformance, if it lasts, will mark a turnaround from years of sluggishness for European markets. And the rally may just feed on itself: As stocks on the continent rise, they're likely to attract fresh assets from around the world, equity bulls say. UBS Group AG analysts said in a recent note that investors' shift away from US assets will channel €1.2 trillion ($1.4 trillion) into Europe's stock market over the next five years. An early impetus for this year's gains came from the proposal by Berlin — famous for its fiscal austerity — to spend hundreds of billions of euros on infrastructure and defense. Citigroup Inc. economists expect the reform to boost growth across the euro area from the second half of 2026. On the other side of the Atlantic, investors are on recession watch again amid concerns around inflation and America's fiscal deficit. Sentiment toward Treasuries took a hit in May after Moody's Ratings stripped the US of its top credit grade, with bond yields also climbing in response to Trump's tax-cut proposals. And in a blow to the president's trade agenda, a US court has issued a rare rebuke blocking many of the import taxes he has threatened and imposed on key partners. A proposed tax measure is also raising alarm on Wall Street as it would increase tax rates for individuals and companies from countries with 'discriminatory' tax policies, potentially driving away foreign investors. The S&P 500 rebounded in May, but remains a laggard for the year. The index has gained only about 0.5% in 2025 compared with a 12% jump in the MSCI All-Country World Index excluding the US. It also ranks 73rd among the 92 indexes tracked by Bloomberg. Beata Manthey, head of European and global equity strategy at Citigroup, said the euro area is in 'a relatively good place' as the European Central Bank has room to reduce interest rates further, while equity valuations aren't stretched. 'Of course if there's a US recession, no market would go unscathed, but the lack of exuberance in Europe makes it more resilient to a deeper selloff,' Manthey said. 'Investors had shunned the region for so long that inflows are still tiny compared with outflows of the past few years.' A slate of Europe's smaller markets is dominating the leader boards this year. Slovenia's blue-chip SBI TOP Index is the world's second-best performing gauge with a rally of 42% in dollar terms, behind Ghana's benchmark. Poland's WIG20 Index has gained 40%, while benchmarks in Greece and Hungary are up more than 34% each. Strategists at Societe Generale SA have recommended peripheral European markets this year, citing a wider risk premium as well as relative political stability. The team continues to predict an outperformance as they expect sovereign bond yields to be more protected than in some of the big spenders such as France and Germany. Defense stocks have been among the biggest winners this year, with seven of the 10 best-performing stocks in the Stoxx 600 related to the sector. All have surged at least 90%, with German contractors Renk Group AG, Rheinmetall AG and Hensoldt AG leading the pack. Banks and insurance stocks have also outperformed in 2025. 'What's not to love about European equities?' said Florian Ielpo, head of macro research at Lombard Odier Investment Managers. 'In the US you're punished for taking risk, but in Europe you're rewarded for it. Inflation looks contained, and there's finally some visibility. In the US, you're still wondering what will happen tomorrow, what tweets will you see.' Corporate earnings have been a bright spot, with first-quarter profits at MSCI Europe companies rising 5.3% compared with expectations of a 1.5% decline, according to data compiled by Bloomberg Intelligence. While many executives tempered their outlooks given lingering trade uncertainties, fewer analysts have cut earnings estimates in the past weeks, suggesting the worst of the downgrades may be over. To be sure, the global trade outlook remains a key risk. A federal appeals court has offered Trump a temporary reprieve from the ruling threatening to throw out the bulk of his tariff agenda. The president also said he would be increasing levies on steel and aluminum to 50% from 25%. Many European industries including miners, automakers and luxury goods are heavily exposed to international markets for revenue. Analysts this year have reduced Stoxx 600 earnings estimates for the coming 12 months by about 1.4%, according to data compiled by Bloomberg. Some market forecasters still bet European stocks will race past their US peers, with the team at JPMorgan Chase & Co. calling for the biggest outperformance on record. On average, a Bloomberg survey of 20 strategists found the Stoxx 600 is expected to gain another 1% from current levels. 'For the first time in a really long time I do believe there's a chance that European stocks can outperform the US market,' said Francois Rimeu, a strategist at La Francaise Asset Management. 'Now for this outperformance trend to hold, earnings will need to show some real growth next year.' —With assistance from Leonard Kehnscherper, Kwaku Gyasi and Michael Msika. YouTube Is Swallowing TV Whole, and It's Coming for the Sitcom Millions of Americans Are Obsessed With This Japanese Barbecue Sauce AI Is Helping Executives Tackle the Dreaded Post-Vacation Inbox How Coach Handbags Became a Gen Z Status Symbol Mark Zuckerberg Loves MAGA Now. Will MAGA Ever Love Him Back? ©2025 Bloomberg L.P. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
CNBC
28-05-2025
- Business
- CNBC
Rising Treasury yields are still a looming risk for this stock market rally
Higher bond yields appeared to help put a damper on the stock market's strong start to the week on Wednesday, with the 30-year Treasury yield pushing back toward the 5% level as the S & P 500 stalled. The tepid day for equities came after Robert Sluymer, technical strategist at RBC Wealth Management, warned in a note to clients Tuesday that higher interest rates are a looming threat for the stock market. "The key risk we see for equities is the path of interest rates, and while a near-term pullback from important technical levels appears to be taking hold, a move above the October 2023 highs by the U.S. 30-year and 10- year yields ... would likely lead to a correction in equities," the note said. The 30-year Treasury yield was trading near those 2023 levels earlier in May, while the 10-year yield would need to jump back near 5% to take out its 2023 highs. Bond yields move in the opposite direction of price, so that lower bond prices equate to higher bond yields and vice versa. US30Y 5Y mountain The U.S. 30-year Treasury yield rose on Wednesday to trade near 5%, putting it near its highs from 2023. There are several reasons that Treasury yields are climbing. For one, the government's deficit spending suggested by the tax bill making its way through Congress has sparked concern about how the U.S. will fund its debt, especially if foreign buyers like the Chinese government decide to shift away from American assets. The fact that inflation expectations have risen by some yardsticks and the Federal Reserve seems content to keep its benchmark lending rate unchanged for now is also leading traders to re-calculate their expectations for future interest rate cuts. Overseas markets aren't helping, either, as bond yields also pushed higher in Japan after a weak 40-year auction for that government's debt. Larry Benedict of The Optimistic Trader said financial markets are currently "more complacent" than he would expect, given the overall environment, and that he expects rates will go up from here and potentially take out their recent highs. "We're at about 4.50% on the 10-year ... The high was 4.60% and some change, and on the 30-year it was [5.09%]. We're within striking distance of that, and I think that should put sort of a crimp in the rally here," Benedict told CNBC. — CNBC's Michael Bloom contributed reporting.
Yahoo
07-05-2025
- Business
- Yahoo
3 ex-U.S. Bank employees tried to lure affluent clients, lawsuit alleges
This story was originally published on Banking Dive. To receive daily news and insights, subscribe to our free daily Banking Dive newsletter. U.S. Bank has sued three former wealth managers for allegedly trying to lure dozens of affluent clients – and their nearly $700 million in managed assets – after they simultaneously quit last month to join RBC Wealth Management. Bankers James Kirk, Darcy Frederickson and Jason Beumer primarily serviced clients with between $10 million and $75 million in assets, and some clients worth far in excess of that, according to the lawsuit. But after they all quit April 15 to work at Royal Bank of Canada, U.S. Bank allegedly discovered that the three had 'aggressively pursued' their U.S. Bank customers 'to induce them to leave U.S. Bank or otherwise to solicit their business,' according to a lawsuit filed in Minnesota on April 30. Kirk, Frederickson and Beumer had each signed contracts, as a condition of their employment, restricting their use of confidential information belonging to U.S. Bank or its customers, and also agreeing not to solicit U.S. Bank clients after their employment. In an email to U.S. Bank, the bankers' attorney, Stevens & Lee partner Thomas Lewis, told a representative of the bank that Kirk, Frederickson and Beumer had 'deleted all US Bank client info from their phones before they joined RBC,' and assured the representative that his clients were complying with their restrictive covenants. Through its own investigation, however, U.S. Bank found that the trio contacted 24 customers on or soon after April 15. One such customer contacted by Frederickson told U.S. Bank that Frederickson had offered to move the customer's relationship to RBC Wealth Management, 'and tried to persuade the client to do so by stating that the client's new Portfolio Manager at RBC Wealth Management would be the former boss of their current Portfolio Manager at U.S. Bank.' The customer told U.S. Bank that Frederickson disparaged the bank, allegedly claiming that the direction U.S. Bank was going was 'bad' for customers. At least one of the 24 customers has informed U.S. Bank that he would be moving his relationship to RBC Wealth Management, to work with Kirk and Beumer. He had been a U.S. Bank customer since 1992, several years before Kirk, Frederickson or Beumer began working at the bank. 'For the 24 customers that have verified they were solicited by one or more of the Defendants thus far, these customers account for combined assets under management of nearly $700 million and $4 million in annual revenue,' U.S. Bank wrote in court documents.
Bloomberg
01-04-2025
- Business
- Bloomberg
Possible Relief Rally: RBC Wealth Management's Carrier
Frederique Carrier, Head of Investment Strategy at RBC Wealth Management, says there is a possibility of a relief rally since much of the bad news has been priced into markets. However she cautions that more menacing threats around tariffs could see markets take a further leg down. She speaks to Bloomberg's Tom Mackenzie on 'Daybreak Europe.' (Source: Bloomberg)
