Debt Crisis
Concern the debt crisis, now in its third year, is not yet solved helped send the Euro Stoxx 50 down 4.8 percent last week, paring its 2012 gain to 5.9 percent. The gauge rose 0.8 percent to 2,472,98 at 8:28 a.m. in London today. At the start of this year, analysts projected companies in the index would earn 293 euros a share in 2013, compared with 231 euros in 2011, estimates compiled by Bloomberg show. The forecast growth over the two years had fallen by 52 percent to 261 euros by Sept. 26, the data show.
The decline in equities last week trimmed the Euro Stoxx 50 Index (SX5E)’s price to 9.5 times estimated 2013 earnings, from a 2 1/2-year high of 10 times on Sept. 14. The Standard & Poor’s 500 Index (SPX) is trading at 12.5 times 2013 forecasts, while the MSCI Asia Pacific Index trades at 11.2 times.
“We have seen a pretty good run up but it has been based more on quantitative easing and intervention,” Peter Garnry, an equities strategist at Saxo Bank A/S in Copenhagen, said in a Sept. 25 phone interview. “When you look at the fundamentals, they are not following up. The downside is larger than the upside.”
bloomberg.com |
