Euro Stoxx 50

Euro Stoxx 50

11 October 2017Reading time: 3 minutes

The Euro Stoxx 50® was founded in 1998 by Stoxx Ltd, which is a subsidiary of Deutsche Börse AG, and compromises the 50 most important stocks of countries within the Eurozone. Dutch listed companies which are included in the Euro Stoxx 50® at the moment are Ahold Delhaize, ASML, ING, Philips and Unilever.In early May, the Euro Stoxx 50® was at a preliminary high of 3,659 points. Since then the index plummeted, which was mainly caused by an increase of the euro against USD according to Bloomberg. For companies which also export their goods and services outside of Europe, the more expensive euro pulls down their results.

 

Analysts from Société Générale claim that investors should reconsider their equity portfolio because of the more expensive euro to optimize their yield.The French investment bank also points out that investors should look for stocks within the Euro Stoxx 50® which have suffered unnecessary by the negative sentiment. For example, several companies who are listed in the index realize their entire turnover from within the Eurozone, such as the Italian bank Intesa Sanpaolo.At the same time Société Générale also points out that among other things ASML, Unilever and Philips do realize a large part of their turnover outside of the Eurozone and therefore could pull down the total result of the Euro Stoxx 50®.

 

The consumer confidence within the Eurozone seems to be one of the support pillars for the Euro Stoxx 50®. At the end of August the consumer confidence was at the same level as before the financial crisis. Recent data of Eurostat shows that the economic growth within the Eurozone came out at 0.6% during the second quarter, while on an annual basis the growth was 2.3%. Also the unemployment within the Eurozone has decreased to 9.1%, which is the lowest number since 2009 according to Eurostat. In the meantime, Moody’s has increased their expectations for the economic growth of the Eurozone for 2017 to 2.1% and for 2018 to 1.9%.However, there are some concerns about the Eurozone because countries which got in trouble during the financial crisis still need a lot of time to fully recover. For example, Portugal and Greece are still struggling with high debts, while the recovery of Ireland depends on several large companies. Furthermore Spain still has to deal with an unemployment rate of 17%, which is one of the highest unemployment numbers within the Eurozone. Meanwhile Italy had to rescue the oldest bank of the country and will be confronted with new elections in 2018.

 

Although the Euro Stoxx 50® has benefited from the economic growth within the Eurozone, there are still some European countries that have a long way of recovery to go which could pressurize the index. It remains to be seen if the if the index will peak again.

 

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17/06/2019 15:04:57