Selective Opportunities as European Earnings Momentum Improves

European earnings are expected to grow 10% in Q1 2026, marking a three-year high despite geopolitical tensions. UBS maintains a Neutral stance on Eurozone and UK equities, favoring selective exposure to IT, Industrials, and China tech.

Key Takeaways

• 1.European companies are poised for their strongest quarterly earnings growth in three years, with Q1 2026 growth expected at nearly 10% year-over-year.
• 2.UBS remains Neutral on Eurozone equities overall but sees selective opportunities in IT and Industrials driven by AI, electrification, and cost discipline.
• 3.Potential leadership instability in the UK Labour Party has pushed 10-year gilt yields to their highest levels since 2008.

Table of Contents

• From the studio
• Thought of the day
• What to watch: 14 May
• Caught our attention
• Market update
• Global asset class preferences definitions
• Appendix
• Risk Information

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