蜜豆视频

We鈥檝e identified six equity key drivers for European markets in the months ahead: (1) a cyclical economic recovery ahead in Europe, (2) beneficiaries of pro-growth reforms in Germany, (3) rising security investments, (4) rebuilding Ukraine and a recovery in Eastern Europe, (5) beneficiaries of lower energy costs in Europe, and (6) globally active European companies with limited global trade risks. We believe that by concentrating exposure toward the beneficiaries of these trends, investors can outperform the broader European market.

We note that the European defense industry is gaining attention due to strong share performance and increased government spending. A key catalyst for assessing whether this positive trend will continue is the upcoming NATO Summit聽in the Hague. With members under pressure to raise their defensive spending targets by 2030, the group鈥檚 collective defense budget could grow from EUR 467 billion (at 2% of GDP) to as high as EUR 1,168 billion (at 5% of GDP), significantly boosting equipment demand.

The European defense market has high potential in our view, yet faces risks from financing challenges and potential US budget cuts, impacting European firms' sales. A trade deal favoring US defense equipment may benefit firms with US exposure but harm those focused on European sales.

We recommend investing in a diversified manner across our six identified drivers for European markets to optimize risk-adjusted returns. Our selection includes companies that do not heavily rely on trade鈥攑articularly in telecommunications, utilities, financials, and health care sectors鈥攖hose with strong pricing power, or those with significant "localfor- local" product offerings where US sales are primarily sourced and produced domestically. Our current stock selection tilts toward the industrials, materials, real estate, and utilities sectors. We anticipate this selection to achieve higher earnings growth than MSCI Europe this year and next (by 0.3 and 3.3 percentage points, respectively) while providing an appealing dividend yield of around 3%.

We like European small- and mid-cap equities given their significant P/E discount compared to large caps鈥攖he largest in more than 20 years. Better manufacturing growth in 2025, driven by rising wages and falling inflation, favors smaller companies sensitive to domestic conditions, in our view. Structural growth trends in industrials, electrification, and decarbonization should further support these stocks. We favor stocks with high corporate quality, self-help strategies, and diversified business models to mitigate risks.

While we currently hold a Neutral view on China, the strong performance of the country鈥檚 state-owned enterprises (SOEs) is drawing investor interest owing to solid earnings and active capital management. We see potential for SOEs to gain further and see strategic opportunities in SOEs with rising dividends and strong cash flows. We've also identified stocks with solid fundamentals that could outperform the market. Our broad outlook on China would likely become more positive with improved clarity on tariffs, stronger earnings data, and/or a market pullback.

In Asia, we favor markets where we believe long-term local stocks drivers, structurally high GDP growth, and healthy earnings growth prospects can weather US tariff threats. In particular, we like Taiwan equities, as the expected acceleration in AI capital spending by US megacap technology companies should support Taiwan鈥檚 IT sector, which accounts for close to 80% of the MSCI Taiwan Index by market cap.

We also think structural growth ideas like power and resources should enjoy solid returns. Economic development, decarbonization, and AI advancements are driving an increase in electricity demand. The International Energy Association (IEA) forecasts a 4% rise in demand for this year and the next, marking the highest annual growth since 2007. And this growth is expected to accelerate further as power infrastructure expands and large projects come online. We see substantial opportunities across the power and resources value chain, including in utilities, infrastructure, power equipment, and storage. The space has a relatively high degree of exposure to markets outside the US.

Volatility in the sector has risen this year owing to concerns about AI data center spending and environmental regulations. Nonetheless, we are confident in the strong growth of data center demand. And with the Republicancontrolled US Congress supporting tax credits for onshore wind and solar, and renewables development creating jobs and income, we expect these credits to be maintained. Additionally, we see long-term opportunities in copper and transition metals due to electrification trends.