Welcome back to Money Movers. Something has changed in Europe. According to our next guest, forecasting European indices to see a 12 to 16% gain in 2026.Joining us to break down this bull case is Deutsche Bank Research head of European equity strategy and head of cross asset strategy, Max Suier. It's good to see you. Welcome back.What's changed in Europe. >> I think plenty of things have changed actually. So, very short term maybe.Let's start with that, right. Sure. >> Earning season we think is going to be ...

Summary of European Equity Strategy Conference Call Industry Overview - The focus is on the European equity market, particularly in the context of potential recession risks and sector performance. Key Points and Arguments Market Outlook - European equities are currently trading in line with long-term cycle average multiples, indicating limited pricing of recession risks [2] - Analysis suggests that European equities have only "travelled" about one-third to half of the way towards pricing a moderate recession or material growth slowdown [2] - The risk-reward scenario remains negative, with a projected downside of -7% to a moderate bear case and -22% to a full bear case [2] Defensive Investment Strategy - A recommendation to shift investments into defensive sectors with relative earnings resilience, such as Defence, Utilities, Software, and Telecoms [4] - German defence companies, particularly Rheinmetall, are highlighted as top picks due to their fundamental resilience [4] Sector Analysis - Defence, Life Sciences, and Software sectors show positive exposure to Trump administration policies, while Semiconductors, Materials & Mining, and Autos are identified as more cyclical and risky [5][8] - Utilities and Telecoms are categorized as the most defensive sectors, with Software and Defence also showing resilience [16] Earnings Expectations - Analysts expect a skew towards downside in upcoming earnings results, particularly for cyclical stocks, with previews indicating that 40 stocks may miss earnings expectations [9] - Key stocks expected to beat earnings include Siemens Energy, Euronext, SocGen, AstraZeneca, and Accor, with a notable concentration in the banking sector [9] Pricing Power and Exposure - Defence, Software, and Semiconductors are noted for having the highest pricing power in the current environment [4][23] - A detailed analysis of stock-level cyclicality, pricing power, and exposure to Trump administration policies was conducted across approximately 550 companies [3][14] Risk Areas - Key areas of downside risk include Semiconductors, Materials & Mining, Construction & Materials, Transport, and Autos, which are considered highly cyclical [5] - The analysis also incorporates exposure to China and the US, with lower exposure preferred for resilience [14][26] Conclusion - The current market environment necessitates a more sophisticated approach to identifying defensives and cyclicals, moving beyond traditional measures [3][14] - The focus should remain on fundamentally resilient sectors while being cautious of valuation levels due to potential earnings downturns, especially in cyclical areas [15] Additional Important Insights - The analysis emphasizes the importance of understanding the interplay between sector performance, macroeconomic factors, and geopolitical influences, particularly regarding US policies and China exposure [3][14][26] - The report includes various exhibits that provide visual data on sector cyclicality, pricing power, and exposure to external factors, aiding in investment decision-making [16][21][23]