Morgan Stanley’s Secker Sees 2008-Era Plunge in European Margins
- Sees stock valuations falling amid hawkish ECB, energy crisis
- JPM’s Matejka says underlying euro zone growth is encouraging
Partially lit commercial buildings at night in Frankfurt, Germany.
Photographer: Ben Kilb/BloombergThis article is for subscribers only.
European profit margins face their biggest slump in more than a decade against the backdrop of a spiraling energy crisis and scorching inflation, according to Morgan Stanley strategists.
“With corporate pricing power starting to fade, the margin outlook is likely to get much more difficult next year,” strategists led by Graham Secker wrote in a note. “Our margin lead indicator is pointing toward the biggest decline in margins since the global financial crisis.”