The reporting season for the first quarter ended on a positive note. The majority of companies have beaten expectations. Our long-standing positive assessment of European equities has so far proved to be correct, and share prices have risen significantly over the course of the year. Selected European equities remain among our favourites. The valuation discount compared to US equities remains high, while dividend yields are attractive at 3.1% for the Eurostoxx 50.

The Asian and European equity markets are likely to be much more promising than the US market over the next twelve months. The main arguments in favour of Europe are the positive earnings revisions and for Asia, particularly the emerging markets there, the expected double-digit growth in corporate profits in 2024.

In the short term, the expected higher yields on ten-year US bonds, which are likely to put pressure on equity valuations, i.e. price/earnings ratios, should prove to be a burden for US equities. In the longer term, we see a positive market environment for US equities due to expected interest rate cuts by the Fed (from the beginning of 2024).

One of the top performers in Asia this year has been the Japanese equity market, which is currently almost at the same high level as in 1989 and 1990. Unlike around 30 years ago, however, valuations are nowhere near as exaggerated as they were back then. In general, Japanese equities offer investors the opportunity to participate in the Asian growth story. The opening up of the Chinese and domestic economies and the return of tourists should have a particularly positive impact. Japan should therefore be a very interesting market for investors in the medium term, even if share prices have already travelled quite far in the short term.

In Europa sind wir nach wie vor sehr positiv für europäische Nebenwerte gestimmt. Die Titel haben sich bislang unterdurchschnittlich entwickelt, die Bewertung liegt um etwa 20 Prozent unter dem Durchschnitt der vergangenen 15 Jahre. Damit sollten die Titel über ein erhebliches Aufholpotenzial verfügen.