Beyond Bulls & Bears

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Equity

Notes from the Trading Desk – Europe

"In our view, movement in the high-yield space will be an important factor to keep track of in the coming weeks as credit and equity markets have been closely correlated of late. Will the move lower gather momentum and spread to other asset classes, or will this pass over and be seen as a short-term correction? Time will tell." - Franklin Templeton European Trading Desk team

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Equity

Why Europe’s Earnings Rebound Could Offer a Fillip for Active Value Investors

"We see signs that European companies are beginning to return to corporate earnings growth. We expect to see fundamentals reassert themselves at the heart of investment decisions. And against that background, we believe investors with exposure to European equities via a passive approach shift to active strategies.” – Dylan Ball, Templeton Global Equity Group

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Equity

Why Abe’s Victory Could Help Lift Japanese Stocks

“In our view, Abe’s victory could lead to four more years of pro-growth policies and the possibility of a second term for the very ultra-dovish Bank of Japan Governor Haruhiko Kuroda.” – Templeton Global Equity Group’s Cindy Sweeting and Alan Chua

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Equity

Why the Indian Equity Market May Need to Swallow a Bitter Pill

A slew of government reforms may have disrupted the Indian stock market in the short term. However, Sukumar Rajah, managing director and chief investment officer, Asian Equity, believes those reforms and a growing Indian middle class could present opportunities for long-term investors.

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Alternatives

Fourth Quarter Hedge-Fund Strategy Outlook: K2 Advisors

“While we cannot predict market tops or bottoms, we can be prudent in how we position portfolios contextually. Perhaps now is the time to consider dialing back risk to some degree. We believe the easy money in this cycle has already been made.” - K2 Advisors

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Perspectives

Does Macron’s EU Reform Agenda Need German Support?

"Without an eager partner in Germany, I think Macron will face challenges implementing his more radical eurozone reforms. Although there is broad support for unification in the wake of last year’s Brexit vote, some of the EU’s Eastern European partners are using all the brakes to prevent unification. I see it as a long road to reach that goal.” – Philippe Brugere-Trelat, Franklin Mutual Series

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Perspectives

What’s Next for Europe as Merkel Is Re-elected

"We think the level of support for AfD does reflect a protest vote from people who have been unhappy with the direction things have been going in Germany. That could have an influence on Merkel’s approach as she looks past her election victory.” - David Zahn, Franklin Templeton Fixed Income Group

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Equity

Why Gold-Mining Stocks Could Regain Some Luster

"It seems to us that gold’s inability to hold a rally over the last 18 months has created fatigue with investors. As a result, many investors have felt they should sell into rallies. However, given the overall global macroeconomic backdrop, this view may be creating an interesting opportunity for longer-term investors.” – Steve Land, Franklin Equity Group

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Perspectives

Time to Reset Expectations?

Global markets have been relatively calm this summer despite many uncertainties. Geopolitical risks have continued across the globe, and in some areas, looming monetary policy changes also appear likely. A key question for many investors is whether the sleepy summer period of low volatility will give way to a more turbulent autumn. Franklin Templeton’s senior investment leaders offer their perspective on the markets and discuss where they see opportunities and risks ahead.

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Equity

Is France on the Cusp of a Thatcher Moment?

French President Emmanuel Macron is preparing to take on France’s powerful unions as he attempts to overhaul the country’s labour code. Here, Philippe Brugere-Trelat, Franklin Mutual Series executive vice president, explains why a Macron victory on this front could open up opportunities for investing in French equities.

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Equity

UK Equity: What Dividends Can Tell Us About UK Economic Sentiment

“Special dividends may indicate that companies would rather return money to shareholders than expand. There could be a lack of investment opportunities and potential concerns around Brexit and future UK economic growth.” - Colin Morton, portfolio manager, UK Equity team

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Equity

An Opportune Time to Change Investors’ Perception of Investing in Europe

“Gross domestic product growth in the euro area has quietly overtaken that of the United States so far this year. But the risks once associated with political uncertainty, populism and fears over the possible break-up of the European Union (EU) have not proven as potent as they initially appeared.” Robert Mazzuoli, portfolio manager, Franklin Local Asset Management