European automotive sector is facing deep crisis
• Demand for cars in EU has stalled and may never return to pre-pandemic levels • Outlook for exports has darkened amid US tariff threats and low Chinese demand Source: Agathe Demarais on X, Bloomberg
Europeans, especially the German carmakers,simply cannot afford losing the US market due to tariffs after taking a hit in other major markets.
They need to be really polite to Trump‘s administration... Source: Econovisuals, Eurostat
The chart of the day:
France’s benchmark bond yield matched Greece’s for the first time on record, the latest milestone in a week marked by mounting anxiety over the fate of Prime Minister Michel Barnier’s government. The rate on 10-year French notes, traditionally considered among the safest in the euro area, briefly rose to 3.03% before paring the move. That was the same as comparable Greek bonds, a country once at the heart of the European sovereign debt crisis. Investors are concerned that France may struggle to pass a budget for next year, with the far-right National Rally party threatening a no-confidence vote to bring the government down if its demands aren’t met. While French bonds rallied after Finance Minister Antoine Armand said he is prepared to make concessions on the 2025 budget, that did little to dent months of underperformance. “France is not Greece,” said finance minister Antoine Armand. "France has . . . far superior economic and demographic power which means it is not Greece.” Humility at its best... Source: FT, LSEG
OUCH! French stocks are set for their worst under-performance against European peers since 2010 as a budget standoff threatens to topple the govt.
Source: BBG, HolgerZ
On an inflation-adjusted basis, including dividends, European stocks are up 2% in the last 17 years.
Source: Mike Zaccardi, CFA, CMT, MBA
French bond premium hits 12-year high as German yields drop amid political uncertainty
Source: PiQ @PiQSuite
The Stoxx Europe 600 index has underperformed the S&P 500 by 21% this year, the most on record.
This comes as European stocks have returned only 3% year-to-date much below the 24% gain of US stocks. The Stoxx Europe 600 index is now on track for its 8th year of underperformance out of the last 10. Over the last decade, European equities have increased by just 50% much less than the S&P 500 return of 187%. As a consequence, the US stock market is now 4 TIMES larger than Europe. Investors are choosing the US over Europe. Source: FT, The Kobeissi Letter
Eurozone wages jumped 5.4% YoY, the biggest increase since the euro was introduced.
The data may complicate the ECB’s easing plans. Source: HolgerZ, Bloomberg
