If things do go well though and the risk on trade comes back into vogue, Garthwaite believes investors should buy the DAX , Enel in Italy, and European insurers like Prudential , L&G, Aviva and Allianz.
The German market could be a major beneficiary of a change in sentiment following heavy losses in the third quarter.
Garthwaite says Adidas , BMW, Siemens and BASF have underperformed global markets overt the past two months and look cheap relative to their peers.
For now Credit Suisse are underweight European stocks. “Relative risk appetite, fund flows and net buy ratings have not yet reached 2010 capitulation levels. Growth fundamentals in Europe remain poor : lead indicators are consistent with a recession , even before further fiscal tightening, peripheral European deflationor the impact of the credit crunch,” said Garthwaite.
Credit Suisse may or may not have investment banking relationships with the stocks mentioned.
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