Gavekal Capital: Declining Expectations for MSCI Europe Earnings

Tuesday, July 8, 2014

Declining Expectations for MSCI Europe Earnings

While earnings estimates have remained fairly steady for the MSCI World Index overall, some fairly dramatic regional differences have cropped up over the last few months-- with particularly pronounced declines in expectations for companies in MSCI Europe:

Looking at earnings estimates by sector for each region in the MSCI World over the last quarter, Europe stands out with negative revisions in all but one group (Information Technology). Over the last six months, earnings expectations have been lowered for every single sector in MSCI Europe while the outlook for companies in Asia-Pacific is the most positive among the three regions.

MSCI World

MSCI Asia-Pacific

MSCI Europe

MSCI North America

About Gavekal Capital

Gavekal Capital is a US registered investment advisory firm that manages the Gavekal Knowledge Leaders Strategy. Knowledge Leaders are a group of the world’s leading innovators with deep reservoirs of intangible capital. These companies often possess competitive advantages such as strong brand, proprietary knowledge or a unique distribution mechanism. Knowledge Leaders are largely service-based and advanced manufacturing businesses, often operating globally. Gavekal Capital seeks to identify the world’s leading knowledge companies through a proprietary process that analyzes corporate knowledge investments.
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