“President Trump’s approach to trade and global alliances may be a wake up call for Europe. The region is signalling a clear and a historical shift, which will require target measures to boost growth efficiently.”
Europe is facing major economic and security challenges. The European Commission (EC) has started translating the Draghi report’s recommendations into effective proposals.
We see three themes shaping sector returns in the coming decade. Artificial intelligence (AI) will support the Information Technology (IT) sector followed by Healthcare, but it is due to extend to others as well. Regarding climate change and geopolitical dynamics, capital expenditure (Capex) will play a more important role than consumption, benefitting Industrials more than the Consumer Staples and Discretionary sectors. Finally, policies supporting deregulation should improve capital efficiency and shareholder returns, to the benefit of Financials.