Latest news with #Citigroup
Yahoo
2 hours ago
- Business
- Yahoo
Goldman and Citi See Europe's Economy Powering Stock Rally
(Bloomberg) -- The perils of trade and geopolitics will only slow the rally in European stocks rather than derail it, according to Wall Street strategists. Security Concerns Hit Some of the World's 'Most Livable Cities' One Architect's Quest to Save Mumbai's Heritage From Disappearing JFK AirTrain Cuts Fares 50% This Summer to Lure Riders Off Roads NYC Congestion Toll Cuts Manhattan Gridlock by 25%, RPA Reports Taser-Maker Axon Triggers a NIMBY Backlash in its Hometown The Stoxx Europe 600 Index is expected to end the year around 557 points, according to the average of 19 strategists polled by Bloomberg. That implies a further 3% advance from Wednesday's close, handing investors annual returns of about 10%. Europe's loosening monetary policy and increased government spending are forecast to give the region's stocks the impetus they need to overcome risks from tariffs and rising international tensions. 'Equity markets have been remarkably resilient, despite many risks,' said Citigroup Inc. strategist Beata Manthey. She noted that global equity market valuations reflected relatively average levels of geo-economic risk in the lead up to the Israel-Iran conflict. 'This could be worrisome from a short-term perspective, but over the longer term we see many structural tailwinds to support European equities.' European stocks have posted moderate moves since mid-May, following a V-shaped recovery that erased all the losses triggered by the US tariff announcements of early April. Recent weeks have proved more volatile, as Middle East tensions intensified and pushed oil prices higher. The Stoxx Europe 600 is down 1.5% this month, with energy shares and utilities the only sectors in the green. 'Many investors we are speaking with are awaiting the end of the truce on US tariffs on July 9 to gain better visibility,' said Societe Generale SA strategist Roland Kaloyan. 'Looking ahead, we anticipate that the European equity market will remain within a trading range.' Most strategists have had to chase the rally in Europe as the outlook brightened, updating the cautious price targets they drew up in January. Challenges to so-called US exceptionalism in stocks, Europe's improving economic prospects, as well as a wide interest-rate differential have fueled bets on the region. Bank of America Corp. strategists led by Sebastian Raedler raised their target for the European benchmark on Friday, after the survey was published. They now see the Stoxx Europe 600 reaching 530 points by year-end. The strategists remain relatively negative, but now anticipate a more modest decline, citing better prospects for global PMIs from the partial US-China trade truce. The positive sentiment is also evident among investors. BofA's own fund manager survey conducted this month before Middle East tensions escalated showed that a net 34% of European investors expect stocks in the region to rise in the coming months. While that's broadly unchanged from May, the net proportion expecting gains in the next 12 months has rebounded to the February high of 75%. On a relative basis, asset allocators are increasingly bullish on Europe. A net 34% of portfolio managers in the BofA survey said they are overweight European equities against their funds' benchmark levels — close to a four-year high. A net 36% said they are underweight US equities, nearly the most in two years. While investors haven't lost sight of the risks posed by trade tariffs, they are growing more optimistic about the economy, which will feed into corporate profits, the survey showed. 'Our view is that the diversification theme has further to go,' said Goldman Sachs Group Inc. partner and chief global equity strategist Peter Oppenheimer, adding the weakening dollar favors European assets. 'In total returns, European stocks offer quite a compelling story for investors, especially given their starting point of having very concentrated portfolios, particularly in US equities.' European stocks have outperformed US peers this year, but the gap is narrowing. Renewed appetite for American tech megacaps, potential tax cuts and optimism about trade negotiations helped the S&P 500 erase its losses for 2025 last month. Still, for Deutsche Bank AG strategists led by Maximilian Uleer, who've been consistently bullish on the outlook for the Stoxx 600, tariffs will be a bigger burden for US companies than their European peers. Earnings momentum and valuations are more favorable in Europe, while political uncertainty remains more of a problem, they said. The outlook for fiscal policy and interest rates also favors Europe, while a potential ceasefire between Ukraine and Russia would be an additional boost. 'Once we have more clarity on US tariffs, the One Big Beautiful Bill, the German budget and fiscal package, as well as NATO spending, markets could start moving higher again in late summer,' the Deutsche Bank team said. 'In the medium-term, European equities could start outperforming US equities again.' --With assistance from Jan-Patrick Barnert, Sagarika Jaisinghani and Leslie Nutakor. (Updates with Bank of America's new target and comment in eighth paragraph) Ken Griffin on Trump, Harvard and Why Novice Investors Won't Beat the Pros Is Mark Cuban the Loudmouth Billionaire that Democrats Need for 2028? The US Has More Copper Than China But No Way to Refine All of It Can 'MAMUWT' Be to Musk What 'TACO' Is to Trump? How a Tiny Middleman Could Access Two-Factor Login Codes From Tech Giants ©2025 Bloomberg L.P. 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Yahoo
3 hours ago
- Business
- Yahoo
Goldman, Citi See Europe's Economic Edge Extending Stock Rally
(Bloomberg) -- The perils of trade and geopolitics will only slow the rally in European stocks rather than derail it, according to Wall Street strategists. Security Concerns Hit Some of the World's 'Most Livable Cities' JFK AirTrain Cuts Fares 50% This Summer to Lure Riders Off Roads One Architect's Quest to Save Mumbai's Heritage From Disappearing NYC Congestion Toll Cuts Manhattan Gridlock by 25%, RPA Reports Taser-Maker Axon Triggers a NIMBY Backlash in its Hometown The Stoxx Europe 600 Index is expected to end the year around 557 points, according to the average of 19 strategists polled by Bloomberg. That implies a further 3% advance from Wednesday's close, handing investors annual returns of about 10%. Europe's loosening monetary policy and increased government spending are forecast to give the region's stocks the impetus they need to overcome risks from tariffs and rising international tensions. 'Equity markets have been remarkably resilient, despite many risks,' said Citigroup Inc. strategist Beata Manthey. She noted that global equity market valuations reflected relatively average levels of geo-economic risk in the lead up to the Israel-Iran conflict. 'This could be worrisome from a short-term perspective, but over the longer term we see many structural tailwinds to support European equities.' European stocks have posted moderate moves since mid-May, following a V-shaped recovery that erased all the losses triggered by the US tariff announcements of early April. Recent weeks have proved more volatile, as Middle East tensions intensified and pushed oil prices higher. The Stoxx Europe 600 is down 1.5% this month, with energy shares and utilities the only sectors in the green. 'Many investors we are speaking with are awaiting the end of the truce on US tariffs on July 9 to gain better visibility,' said Societe Generale SA strategist Roland Kaloyan. 'Looking ahead, we anticipate that the European equity market will remain within a trading range.' Most strategists have had to chase the rally in Europe as the outlook brightened, updating the cautious price targets they drew up in January. Challenges to so-called US exceptionalism in stocks, Europe's improving economic prospects, as well as a wide interest-rate differential have fueled bets on the region. The positive sentiment is also evident among investors. The Bank of America Corp. fund manager survey conducted this month before Middle East tensions escalated showed that a net 34% of European investors expect stocks in the region to rise in the coming months. While that's broadly unchanged from May, the net proportion expecting gains in the coming 12 months has rebounded to the February high of 75%. On a relative basis, asset allocators are increasingly bullish on Europe. A net 34% of portfolio managers in the BofA survey said they are overweight European equities against their funds' benchmark levels — close to a four-year high. A net 36% said they are underweight US equities, nearly the most in two years. While investors haven't lost sight of the risks posed by trade tariffs, they are growing more optimistic about the economy, which will feed into corporate profits, the survey showed. 'Our view is that the diversification theme has further to go,' said Goldman Sachs Group Inc. partner and chief global equity strategist Peter Oppenheimer, adding the weakening dollar favors European assets. 'In total returns, European stocks offer quite a compelling story for investors, especially given their starting point of having very concentrated portfolios, particularly in US equities.' European stocks have outperformed US peers this year, but the gap is narrowing. Renewed appetite for American tech megacaps, potential tax cuts and optimism about trade negotiations helped the S&P 500 erase its losses for 2025 last month. Still, for Deutsche Bank AG strategists led by Maximilian Uleer, who've been consistently bullish on the outlook for the Stoxx 600, tariffs will be a bigger burden for US companies than their European peers. Earnings momentum and valuations are more favorable in Europe, while political uncertainty remains more of a problem, they said. The outlook for fiscal policy and interest rates also favors Europe, while a potential ceasefire between Ukraine and Russia would be an additional boost. 'Once we have more clarity on US tariffs, the One Big Beautiful Bill, the German budget and fiscal package, as well as NATO spending, markets could start moving higher again in late summer,' the Deutsche Bank team said. 'In the medium-term, European equities could start outperforming US equities again.' --With assistance from Jan-Patrick Barnert, Sagarika Jaisinghani and Leslie Nutakor. Ken Griffin on Trump, Harvard and Why Novice Investors Won't Beat the Pros Is Mark Cuban the Loudmouth Billionaire that Democrats Need for 2028? The US Has More Copper Than China But No Way to Refine All of It Can 'MAMUWT' Be to Musk What 'TACO' Is to Trump? How a Tiny Middleman Could Access Two-Factor Login Codes From Tech Giants ©2025 Bloomberg L.P. Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
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Business Standard
3 hours ago
- Business
- Business Standard
Strait of Hormuz closure risk may push Brent crude to $90, warns Citigroup
A potential shutdown of the Strait of Hormuz amid rising Gulf tensions could trigger a sharp but brief surge in crude prices, according to Citigroup analysts tracking energy markets New Delhi Brent crude prices could surge to nearly $90 a barrel if the Strait of Hormuz were to be closed, Bloomberg reported citing Citigroup Inc. Analysts at the bank, including Anthony Yuen and Eric Lee, said such a scenario would trigger a sharp but likely short-lived price spike. 'Any closure of the Strait could lead to a sharp price spike,' the analysts wrote in a recent note, referring to the bank's bullish case. 'But we think the duration should be short, as all efforts would focus on a reopening, so that it should not be a multi-month closure.' Strategic waterway moves 20% of oil The world depends heavily on oil, and a big part of that supply moves through the Strait of Hormuz. As tensions grow between Iran and Israel, this narrow waterway in West Asia is once again at the centre of global concern. Just 33 kilometres wide at its narrowest point, the Strait of Hormuz is one of the most important oil routes in the world. Its role is especially critical for energy-importing countries like India. The Strait of Hormuz, a critical chokepoint at the entrance to the Persian Gulf, sees the transit of nearly 20 per cent of the world's daily oil output. Crude shipments from key OPEC members like Saudi Arabia and Iraq pass through the narrow channel, making it vital to global energy markets. Citigroup's scenario assumes that up to three million barrels per day could be disrupted over a period of several months if the strait were blocked, the news report said. Muted impact on crude prices While tensions in the region also raise concerns about Iranian oil supply, Citigroup believes any interruption to Iran's crude exports would likely have a muted effect on prices. The bank noted that Iran's shipments have already been declining, with Chinese refineries — key buyers — reducing their purchases. Any move to block the Strait of Hormuz would raise serious concerns around the world, as it could affect a large part of the global oil supply. As of now, Brent futures are trading at around $77 per barrel. The possibility of a geopolitical escalation in the Gulf region continues to be a key factor to watch for energy markets. Israel-Iran conflict A missile fired from Iran struck the main hospital in southern Israel early Thursday, wounding several people and causing significant damage. While the injuries were not life-threatening, the facility reported extensive destruction. Israeli media broadcast visuals showing shattered windows and thick black smoke billowing from the site, the Associated Press reported. Additional Iranian missiles struck a high-rise apartment complex in Tel Aviv and other locations in central Israel. According to Israel's Health Ministry, at least 240 people were injured in the attacks, including four who are in serious condition. Israel targets Khamenei, nuclear site Israeli Defence Minister Israel Katz held Iran's Supreme Leader Ayatollah Ali Khamenei responsible for the assault. 'The military has been instructed and knows that in order to achieve all of its goals, this man absolutely should not continue to exist,' Katz said. In retaliation, Israel launched an airstrike on Iran's Arak heavy water reactor, a key site in the country's nuclear programme. Iranian state television reported no radiation threat from the attack, noting that the facility had been evacuated beforehand. 'Decision on Iran strike in two weeks' In Washington, the White House said President Donald Trump will decide within two weeks whether to launch a military strike on Iran. The administration stressed that diplomacy is still on the table. 'Based on the fact that there's a substantial chance of negotiations that may or may not take place with Iran in the near future. I will make my decision whether or not to go within the next two weeks,' White House Press Secretary Karoline Leavitt quoted Trump as saying. [With agency inputs]
Argaam
4 hours ago
- Business
- Argaam
Oil could surge to $90 if Strait of Hormuz closed: Citigroup
Brent crude could jump to around $90 a barrel if the Strait of Hormuz is shut, according to Citigroup Inc. 'Any closure of the Strait could lead to a sharp price spike,' analysts including Anthony Yuen and Eric Lee wrote in a note, citing the bank's current bullish case scenario. This is due to the strategic importance of the Strait of Hormuz, which accounted for more than a quarter of global seaborne oil trade last year and in the first quarter of 2025. Any disruption to Iranian crude exports could have a smaller price impact than expected, according to Citigroup. The country's shipments have been falling and Chinese refineries are buying less, the bank said.
Bloomberg
7 hours ago
- Business
- Bloomberg
Oil Could Spike to $90 If Strait of Hormuz Shut, Citigroup Says
Brent crude could jump to around $90 a barrel if the Strait of Hormuz is closed, according to Citigroup Inc., which added that a prolonged halt to shipping through the crucial waterway would be unlikely. 'Any closure of the Strait could lead to a sharp price spike,' analysts including Anthony Yuen and Eric Lee wrote in a note, citing the bank's current bullish case scenario. 'But we think the duration should be short, as all efforts would focus on a reopening, so that it should not be a multi-month closure.'
