In some ways, the Washington shutdown illustrates a crisis of governance that can be detected on both sides of the Atlantic. By Sara Miller Llana ,Staff writer / October 2, 2013 People take pictures in front of the steps of the closed Lincoln Memorial. Most of the federal government is closed Tuesday in Washington. Alex Brandon/AP Enlarge Paris European leaders, mired in economic woe, have garnered thinly veiled and sometimes overt criticism from across the Atlantic for how they’ve navigated their domestic crises. Governments have fallen across Europe in recent years. Just today Italy is yet again on the brink, facing its own political collapse. The Christian Science Monitor Weekly Digital Edition But it is with incomprehension that Europe views the US this week, after a congressional dispute over President Obama’s healthcare plan led to a US government shutdown. So far European markets have reacted calmly to America’s political gridlock. And the shutdown has little direct impact on specific transatlantic relations. But it does add to a sense in Europe that the US is bogged down and focused elsewhere, even as discontent over governance is equallydiscernible on both sides of the Atlantic. RECOMMENDED: Think you know Europe? Take our geography quiz. It fuels an already confused debate when it comes to the future of transatlantic relations, says Ian Lesser, senior director for foreign and security policy at the German Marshall Fund of the United States in Brussels. Europe is already worried that the US is pivoting to Asia, and what this would mean for European strategic interests…. [The shutdown] will also reinforce existing European anxieties about a more inward-looking, less activist US. The Obama administration has acknowledged the global impact of the shutdown.
Europe’s cheap stocks set for a long catch-up rally
Typically, stock market rallies start with investors snapping up the most stable, “quality” companies, before moving into stocks with the best earnings growth prospects. When that trade becomes crowded, they pour into whatever is still cheap, before ceasing to buy altogether. That final phase has now started: for the past three months, value funds invested in Europe’s cheapest large caps have attracted more money than those buying firms for their growth potential, according to Morningstar. After lagging for four of the past five years, value stocks – now touted by JPMorgan, Societe Generale, Nomura and Natixis, among others – have a lot of catching up to do. On a stock price to earnings basis, the gap between value stocks and growth shares is among the widest seen in the past decade, according to Thomson Reuters Datastream. “Finally, you have some areas of the market that are becoming investable again – banks, peripherals. They have massively underperformed for three or four years because of economic activity in Europe, political uncertainty, etc. The catch-up could take a few years,” said Emmanuel Cau, equity strategist at JPMorgan. Top weights in the MSCI Europe Value Index include bank HSBC , and energy giants BP, Royal Dutch Shell and Total. While the STOXX Europe 600 trades at 12.6 times next year’s expected earnings, according to StarMine, HSBC trades at 10.4 times, BP at 7.7 times, with Shell and Total both at 8.2 times. The amount of money invested in European large-cap value equities was 24 billion euros ($32.49 billion) by the end of August, half as much as five years ago, Morningstar data shows. “The common theme is catch-up by lagging assets. That’s a late-cycle theme,” said Christopher Potts, head of economics and strategy at Cheuvreux.
RPT-Europe’s cheap stocks set for a long catch-up rally
The home team are one place above HSV in 15th, but they have not actually won this season.Nurnberghave drawn five games and lost twokeeping ahead of Hamburg on goal differencethus proving the costly effect of Hamburg having the league’s worst defensive record. 2. Anzhi Makhachkala Epsilon/Getty Images We finish up with our usual bottom two and the only outstanding question: Which team occupies the bottom spot and which avoids that rather dubious honour? This time, it’s Russian Premier League side Anzhi Makhachkala who come in in second place, thanks to an unbeaten week since our last ranking. They are, however, still winless for the season after 11 matches. Anzhi are theonly club in Russia to be in this position after Tom Tomsk picked up an overdue win recently. Anzhi somehow managed a 0-0 draw away to CSKA Moscow, missing key forwards Alan Dzagoev and Seydou Doumbia through injury, and followed that up with a 2-2 home draw against Amkar Perm. An 88th-minute goal for the away side looked to have consigned Anzhi to their sixth defeat of the season, but a 90th-minute equaliser from 20-year-old Pavel Solomatin quickly turned that into a sixth draw instead. Two points from two games for Anzhi, who have now lost just once in their last five, but their inability to win games still leaves them rooted to the foot of the Russian Premier League. Samuel Eto’o, Roberto Carlos and all those flights from Moscow to Dagestan seem a long, long time ago now. 1.
Europe’s Biggest Under-Achieving Clubs Featuring AC Milan, Dinamo Kyiv, Schalke
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