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management and stock picking. "Even if are unlikely to go lower from here, the
current levels suggest a rich opportunity set for stock pickers for the next 12 months," write
Alla Harmsworth and team.
Intra-sector correlations are at 20-year lows on both sides of the Atlantic, and valuation
spreads are wider than usual across the whole market and within sectors, they note.
"This suggests a heightened potential ability to identify idiosyncratic 'winners' even
amongst peers within narrow market segments," says Harmsworth.
It'll be interesting to see whether this low correlation environment continues even if the
stocks rally starts to peter out.
(Helen Reid)
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MORNING CALL: SELL-OFF TO SPREAD TO EUROPE (0618 GMT)
Good morning and welcome to Live Markets.
European stocks are in for a turbulent start to the week after a sharp sell-off in Asian
shares overnight, with fears of resurgent inflation taking their toll on markets near record
high levels.
Asian shares fell the most in more than a year, tracking a much weaker Wall Street
session
after Friday's U.S. payrolls report showed wages growing at their fastest pace in more than
8
years.
Spreadbetters call the DAX 153 points lower at 12,632.4, the CAC 40 down 64 points at
5,300.7, and the FTSE down 79 points at 7,364.
(Helen Reid)
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(Reporting by Danilo Masoni, Helen Reid, Kit Rees and Julien Ponthus)