EU equities decline
The MSCI Europe ETF declined by 1.97% in the week ending May 29, 2015. The markets showed weakness on Greece’s woes combined with a 1Q15 contraction in the Swiss economy.
Switzerland’s GDP (gross domestic product) fell 0.2% in 1Q15, the highest decline in six years. The growth was impacted by the franc’s record surge after its depegging against the euro, which resulted in lower exports.
Other macro data from the European Union indicate high confidence despite concerns about Greece. Eurozone economic confidence remained near a four-year high in May as a weaker euro and low-cost debt boosted business activity. Confidence rose among manufacturers, retailers, service providers, and construction firms.
The GfK Group’s forward-looking German Consumer Confidence Index rose above consensus forecasts to 10.2 for June. However, France’s consumer confidence slipped from the multi-year highs reached in March, according to the French statistical agency INSEE.
EU equities (EFA) outperformed other major markets in 2015 due to QE (quantitative easing) announced by the European Central Bank, a weaker currency, and rising exports.
Impact on asset managers
The European Commission expects 1.5% growth for the region in 2015, partially helped by QE and supported by reforms. First-quarter growth is in line with the European Commission’s expectations. The Eurozone expanded by 1.6% in 1Q15. Major economic recoveries were seen in Spain and France.
The situation with Greece is weighing heavily on investors. A solution for Greece will provide a big boost to European markets.
Stock market performance is one of the key drivers of asset managers’ revenues. Major asset managers in the EU region include BlackRock (BLK), Goldman Sachs (GS), Morgan Stanley (MS), Deutsche Bank AG (DB), and UBS Group (UBS).