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Feb 18
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AVOID
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Volodymyr Zelenskiy
President of Ukraine
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"We will not let other European nations go either." Zelenskiy explicitly warns that Putin's ambitions are not limited to Ukraine but extend to the broader European continent. This introduces significant geopolitical tail risk for European markets. If the conflict threatens to spill over or if Russia maintains a permanent aggressive posture against the EU, European assets warrant a higher risk premium compared to US counterparts. AVOID. The geopolitical overhang acts as a cap on valuation multiples for European indices. If the conflict remains strictly contained within Ukraine or ends sooner than expected, European equities could rally on relief. |
Bloomberg Markets
Zelenskiy Says He Cannot Imagine Putin Withou...
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Feb 18
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WATCH
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Joanna Rondeau
ECB Editor, Bloomberg
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Rumors are circulating that Lagarde may leave the ECB early, coinciding with French presidential elections where the "far right is riding high," creating anxiety about whether "we entrust the far right in France to have a say in picking the successor." Central Bank stability is a pillar of currency strength. If the ECB presidency becomes a political football in a volatile French election cycle, the uncertainty will likely force a risk premium onto the Euro and European assets. Investors typically sell the currency of regions undergoing leadership crises. WATCH. Monitor for confirmation of Lagarde's plans. If the rumor gains traction, it is a negative catalyst for the Euro and European equities due to governance uncertainty. The ECB has explicitly denied the report, and Lagarde has previously stated she is "not a quitter," meaning the status quo could easily remain. |
Bloomberg Markets
Lagarde to Step Down Early From ECB Position,...
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Feb 16
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LONG
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Marco Rubio
Secretary of State
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Rubio emphasizes that Hungary's success is "vital for our national interests" and notes the removal of energy impediments. Hungary serves as a critical manufacturing hub (the "industrial backyard") for major German companies (Mercedes, BMW, Audi). If Hungary secures cheap energy (via sanctions relief) and political stability (via US backing), input costs for German industrials decrease, and supply chain risks vanish. LONG German Equities as a second-order beneficiary of Hungarian stability. Broader German macroeconomic weakness unrelated to its Hungarian supply chain. |
Bloomberg Markets
Rubio Says US, Hungary Are Entering 'Golden E...
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Feb 16
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LONG
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John (iShares)
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"We are seeing people really allocating to credit as a way to perhaps diversify their portfolios from government bonds where I do see more risk from fiscal spend... Last year we saw more than 50% of flows into bond ETFs going into European fixed income strategies." Investors are fleeing U.S. Treasuries due to fiscal profligacy/volatility and moving into Investment Grade (IG) credit and European assets. The "structural favoritism towards Europe" suggests undervalued assets relative to the U.S. LONG High Quality Corporate Credit and European fixed income/equities. Contagion from U.S. volatility or a resurgence of inflation in the Eurozone. |
Bloomberg Markets
Memory Chip Shortage is Global Crisis in the ...
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Feb 16
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LONG
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Adam Lynn
Market Strategist / Guest Speaker
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"What's been its weakness for the past few years is now actually playing to its strengths... It's got financials which are performing pretty well. It's got industrials." The US market is heavily skewed toward expensive tech. As global growth expectations rise ("nice cyclical environment"), capital is rotating into undervalued cyclical sectors (Financials/Industrials) where Europe has a heavy weighting. This acts as a valuation floor and a diversification play against US concentration. LONG Europe as a cyclical/value alternative to US Tech. Contagion from a sharp US correction could drag down global betas despite better valuations. |
Bloomberg Markets
US Stocks to Lag European Peers on AI
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Feb 14
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LONG
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Michael
Guest / Geopolitical Analyst
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The speaker notes, "I don't think we'll ever be back to the place that we were where we completely subsidize European security... you've got to get to 5% [defense spending]." He also mentions Europeans are "stepping up with the defense industrial base." The US withdrawal of security subsidies forces European nations to drastically increase domestic military spending (from 2% to 5% targets). This capital flow directly benefits the European defense industrial base and general European equities exposed to rearmament. LONG European Defense and Industrials due to structural spending mandates. A change in US administration policy or European economic recession curbing budget capabilities. |
Bloomberg Markets
Is Trump Gearing Up to Strike Iran Again?
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Feb 11
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NEUTRAL
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The speaker notes that in Europe, "more analysts have downgraded rather than upgraded profit estimates" and the region depends heavily on just a few sectors like financials. Because the region is a "mixed bag" and lacks the broad growth drivers seen in the US or the political clarity seen in Japan, they maintain a neutral stance. NEUTRAL. Further deterioration in European industrial or financial data could turn this view negative. |
Bloomberg Markets
Software Selloff Is a Chance to Increase Expo...
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