1. UK shareholder returns at record levels.

While US shareholder returns — composed of dividends and net buyback yields — fell to a record low in July, British companies are returning money to investors at a record pace, according to Societe Generale strategists.

2. Deal or no deal, AstraZeneca is a bargain.

The concern over reported talks might be creating an opportunity. After plunging on a Financial Times report of merger discussions with Bristol-Myers Squibb, shares of AstraZeneca recovered somewhat when Reuters reported there are no ongoing talks. Either way, AstraZeneca shares are still down over 10% for the year. They trade at less than 15 times forward earnings, with expected growth over 10%.
That’s the definition of a bargain.

3. Hope for the luxury sector.

Hopes of progress to ending the U.S.-Iran conflict boosted sentiment in a sector highly exposed to tourism flows and consumer confidence.
"Results confirmed a gradual recovery in luxury demand and a stabilisation in earnings after over two years of downgrades," write UBS analysts Zuzanna Pusz and Robert Krankowski.
Investor caution is still reflected in valuations. Sector multiples have fallen from post-pandemic highs, but significant differences remain.
Among STOXX Luxury 10 members, LVMH is the cheapest at roughly 20 times forward earnings, down from 36x five years ago, while Cucinelli stands out at 38x, still down sharply from 80x in 2021.

4. AI boom has boosted the weights of Korea and Taiwan in the MSCI Emerging Market index.

Just nine companies — mostly the big Taiwanese and Korean tech firms, plus Alibaba and Tencent in China — now account for more than 40% of MSCI EM, making it even more concentrated than the U.S. index.
Korea and Taiwan are only still classed as EMs by MSCI for the technical reason that it can be difficult for international investors to trade their currencies.

5. Morgan Stanley says India to extend outperformance.

“India's improving growth and relatively benign valuations could sustain its recent outperformance against Asian and emerging-market peers.
Current earnings season and high-frequency indicators signal accelerating domestic growth.
MS characterises India as a defensive growth market, supported by an undervalued currency, moderate real rates and fiscal stability.
Expects investment-to-GDP ratio to rise to 37.5% over the next five years.
However, the durability of the rally hinges on global conditions, particularly shifts in sentiment around AI-led capex.”
Below: India’s Nifty50 index is still negative for the year.

Not a subscriber yet?