Key themes to survive low growth and high volatility
European capital goods stocks couldn’t escape the recent market turmoil and are down 20%
compared to December’s elevated levels. Moreover, we believe that the correction between
April and August 2015 was driven by concerns about falling oil prices, a slowdown in the
Chinese economy and concerns about an industrial recession in the US. Similar to Q2 last year,
Q4 results were broadly in line with expectations. At current valuations, we therefore think that
the rebound may carry into the second quarter as much as we saw a recovery September
through November last year.