Barclays strategists have turned bearish on European quality stocks, saying inflation risks are approaching and earnings stability is no longer anchoring the market. According to Sina Finance, a team led by Emmanuel Maconga wrote in a research note that valuations have only returned to long-term averages, earnings advantages are narrowing, and European quality stocks lack support for a sustained rebound.
The strategists upgraded low-volatility stocks to Neutral, describing the segment as a more attractive macro hedge tool. According to Sina Finance, the report also said interest rates remain the main driver of style-factor performance.