新兴市场-股票策略-盈利：继续向前.docx

Please refer to important information and MAR disclosures at the end of this report
FOCUS | EMEA
29 October 2018
EQUITY DERIVATIVES
Earnings: Marching ahead

KEY MESSAGES
The earnings season picks up pace in Europe this week. We believe earnings to be a key driver for equities for the rest of this cycle and the current earnings season to be the key to shift investor sentiment post the recent market sell-off.
Value overweight: In Europe we maintain a positive bias towards value sectors like Banks, Insurance, Oil & Gas, Mining, Industrials and Healthcare.
We remain constructive on core equity markets like French and German equities. We see risks in UK domestic equities, Swedish and Italian equities.
TRADE IDEAS
Option: Long Worst Of (SX7E, SXAP, SXEP) Dec19 105% call for % indicatively to position for a cyclical rebound in equities.
Risk: The risk of buying a worst-of-call is limited to the premium paid. The option will expire worthless if the exercise settlement value of the worst-performing underlying is below the call strike.

Earnings season kicked off in Europe last week, with more earnings announcements e in the next few weeks.
Most of the European banks, healthcare and Oil&Gas report this week.
With the widespread risk-off sentiment in global markets driven by equities, we believe earnings, not valuations, will be a key driver, which could lead to a rebound in equity markets.
Fig. 1: STOXX 600 reporting calendar
Week of
22-Oct
29-Oct
5-Nov
12-Nov
19-Nov
Banks
10%
70%
16%
3%
0%
Industrial Goods & Services
29%
15%
34%
13%
4%
Health Care
4%
59%
18%
16%
1%
Technology
40%
11%
11%
25%
20%
5%
Personal & H Goods
13%
62%
11%
1%
Automobiles & Parts
30%
30%
33%
1%
5%
Chemicals
37%
12%
10%
9%
21%
26%
4%
Insurance
6%
69%
15%
0%
Utilities
19%
44%
22%
4%
Oil & Gas
42%
53%
5%
0%
0%
Food & Beverage
67%
8%
18%
0%
5%
Construction & Materials
16%
29%
30%
25%
28%
26%
3%
municatio