Q2 EARNINGS END ABOVE CONSENSUS, WITH THE US LEADING. EXPECT BETTER GROWTH AHEAD

Highlights:

• The Q2 reporting season has contributed to sustain equity momentum and next earnings
  development should continue to do so.
• Surprises and growth for Q2 look better than feared and we notice an improvement in earnings since our last update in late July. Instead, sales have worsened.
• The US maintains leadership and the appreciating trade-weighted euro along with oil price trend should add to the positive S&P 500 earnings momentum.
• In the next quarters numbers should improve thanks to the policy action and continuing recovery.
• While it will be a bumpy road, earnings development should be enough to sustain positive returns ahead and a rotation towards the value-cyclical names and sectors.
• Among risks we consider: higher-than-expected Covid infections, Hard Brexit, US election with a
  blue wave as a threat to IT, energy, pharma and tobacco sectors, in particular.