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The objective of the President André Amiel is 4 millionThe European wide index DJ Stoxx 600 rose 0Of course the migration has a cost for usAll economists agree the Poland is first luckyHis taste in decoration are little differentIn Paris the CAC 40 index is thus hoisted above 3The crisis of the SPD is far more profound and oldBut it is also known to speak when neededHe suggests planing each device of 5 which would 3The two accused deny having behaved badlyAnalysts are generous with European societies. They continue to revise increase the recipients Outlook for current year. This is evident with latest figures provided by the Office of studies FactSet to "echos". "The ratio between bearings and degradations moved to 1.20 for fiscal year 2006, demonstrating the optimism prevailing among the analyses in support of European values," says Jean-Luc Buchalet, founder of Pythagoras Corporation and responsible for the investment strategy of FactSet. For him, this feeling is a direct result of a structure of European profits strongly influenced by the evolution of the global economy. "Some 70 of the benefits of the broad index MSCI Europe growth can be explained by global growth." "By contrast, European companies are at 10 of their profits to sales in their home markets", says strategist. However, as many world and European conditions is well despite a certain slowdown. The Continent took off finally. Hence the generally positive opinion of analysts to European firms. The slight decrease in the results anticipated for the next fiscal year is the mechanical product of faster recovery of estimates for the current year.
Across the Atlantic, the phenomenon is different. For 2006, the forecast stabilize one month on the other, thus accompanying economic soft landing. "Unlike their European competitors, the US groups are more sensitive to local growth." Their dependence on the global economy is only 55. "In contrast, profits are correlated to the national economy of 22, twice more than in Europe", details the expert of FactSet. In 2007, he is betting that American companies suffer more than their European counterparts of the local downturn, considers.
Historic peak for profits
"Taking the hypothesis of a bursting real estate bubble in the United States without effect on other sectors of activity, we would have a direct impact on the growth of 1 less, putting GDP from 3.5 to 2.5 ", says Jean-Luc Buchalet. "In Europe, the consequences of the US slowdown would be felt by a decline of 0.4 of GDP." "By adding to the negative effects of the increase in the rate of the ECB and the continuation of the strengthening of the single currency against the greenback, it would be a GDP of the euro zone of only 1.5, 2.5 mainly advance currently."
Side profits, rated Western societies returns are at their historical peak for half a century. In the long term profitability peaks coincide with cycle swings. "On average, this is reflected in the past by a decline of 9 of the results in annual landslide", noted the strategist.
Applying this pattern to the referred macroeconomic hypothesis, the average profit shown by the consensus of analysts are excessive. "The year 2007 will be characterized by strong revisions down the upcoming results, which would be a major shift after four years of continuous bearings", summarizes the specialist. Continuing on this path, short and long rates are intended to decrease in 2007, with next year, interest rates to 4.50 in the United States and 3 in Europe, advance Jean-Luc Buchalet.
Such a situation would bring equity markets to more caution, with a strong infusion of volatility and a decline in the indices. A shorter maturity, by end 2006, not panic. "The risk premium levels on European exchanges (4.2) show that a large part of the probable decline is already registered in the course, paving the way for the traditional year-end rally," he concludes.
