Page 13 - ISQ July 2021

JULY 2021

STOXX 600: 2021 EARNINGS GROWTH
(Selected Sectors)

Sector 2021 Earnings (Euro Billions) 2021 Growth %

Technology 43 11.9

Industrials 47.7
130.1
Healthcare 67.1
4.0

Financials 133.5
30.3
Consumer (non-cyclical) 62.8
9.3

Consumer (cyclical) 64.2
179.8
Base Materials 64.8
70.4

Source: I/B/E/S data

kets. The recovery of the pound and euro against many other Year-to-date performance from the U.K. and European equity
global currencies over the last year has been a reflection of markets has been strong. Whilst there can always be volatility in
greater confidence, but overall enthusiasm levels are still financial markets, the debate appears to be more set for next
modest against the norms of five or ten years ago. Once again, it year rather than the rest of this year, given the current scope for
can be easy to overly rely on recent data. improving full year 2021 realities. Prospects for 2022 and beyond
however remains more of a debate, especially if global inves-
And the third key influence? Unsurprisingly this relates to spe- tors’ confidence continues to grow. Active investment will be
cific supply issues. The U.K. and European markets are always more and more critical for equity markets in the U.K. and
influenced by their sector specific investment exposures and Europe.
underlying global market exposure. Certainly by contrast
indices in the United States or Hong Kong / China not only have
a higher technology sector allocation but also a much greater
focus on their respective domestic profitability. On the former KEY TAKEAWAYS:
observation, sector allocations in the U.K. and European equity • U.K. and European stock markets have performed
markets are higher in the financial, healthcare, basic materials well year-to-date.
and consumer sectors than technology. Whilst on the latter
point - compared to the U.S. market - there is a proportionately • Prospects remain strong for 2021 but markets always
heightened impact from the emerging markets. Such different look forward.
sector exposures helps to explains some of the equity market • Global investors are set to keep raised allocation
performance differences over the last decade and the con- levels.
trasting performance of the last seven or eight months in • Heightened active investment focus.
particular. As for future equity market prospects it highlights to
all investors importance of active investment in the U.K. and
European equity markets for the rest of this year, next year and
beyond.

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