LIVE MARKETS-Higher yields bad news for European small and mid caps
Welcome to the home for real-time coverage of markets brought to you by Reuters reporters. You can share your thoughts with us at markets.research@thomsonreuters.com
HIGHER YIELDS BAD NEWS FOR EUROPEAN SMALL AND MID CAPS
Global bond yields rose last week - you may have noticed - with stock and currency dominos falling in turn.
The next domino is sell-side analyst calls and Barclays have a note out Monday, downgrading European small caps and Britain's FTSE 250 to neutral from buy because of the new higher rate environment.
"We still think (small caps) are attractive, trading at a 20 year low valuation relative to the market."
"But given the risk that yields could continue higher from here and (we're) still awaiting a definitive uptick in European economic activity data, we think it is prudent to downgrade small caps while we wait to see how these two drivers play out," they say.
"We also take the opportunity to downgrade our view on FTSE 250 (the British small and mid cap index) from overweight to neutral, given higher UK yields are having a similar effect there, and there are worries the expected UK domestic recovery is in danger of stalling," they add.
(Alun John)
*****
FOR MONDAY'S OTHER LIVE MARKETS POSTS
HOW GERMAN ELECTIONS CAN AFFECT FINANCIAL MARKETS CLICK HERE
EUROPE BEFORE THE BELL: FUTURES DOWN AS TRADERS EYE STRONG US ECONOMY CLICK HERE
FORGET THE SOFT LANDING, JUST KEEP FLYING CLICK HERE
Related Articles
[U.S. IPO] Valuation Doubles Figma’s Pre-IPO Level — Canva’s Latest Funding Hints at Public Market Debut
TradingKey - Following the strong market reception of design collaboration platform Figma’s IPO, which has reignited momentum for software company listings, another online design platform, Canva, appears to be preparing for a potential public offering.
Powell's Jackson Hole Speech: For U.S. Stocks, Hawk or Dove Signal Could Be a Lose-Lose?
TradingKey - As U.S. inflation and labor market data show signs of rebalancing, Treasury traders and Wall Street banks have largely priced in a rate cut at the September FOMC meeting — the first of 2025. Yet both a more dovish-than-expected tone and a potential surprise hawkish signal from Fed Chair
Eurozone Q2 GDP Commentary: Will the Euro's Upward Momentum Persist?
TradingKey - On 14 August 2025, Eurostat published Q2 GDP figures, revealing a drop in the Eurozone's quarter-on-quarter growth from 0.6% in the first quarter to 0.1%. Consequently, annual growth eased from 1.5% to 1.4%. The slowdown primarily stems from the diminishing boost from European...
Ethereum Price Prediction: Will ETH Extend the Rally? What’s the Future Trend?
Ethereum's impressive 2025 rally has been largely fueled by inflows from spot ETFs and a surge in institutional holdings, signaling growing confidence in its role as a core asset in the crypto market. However, to officially confirm the start of a new bull cycle, ETH must break above the critical $4,
Bitcoin Price Forecast: Trends and Investment Outlook from 2025 to 2030
From $0.01 in 2009 to $120,000+ in 2025, Bitcoin has evolved from obscurity to a globally recognized financial asset. While institutions and governments increasingly embrace it, investors must remain vigilant against volatility, security risks, and scams.
