Conflicting expectations but recovery has started

SchroderSalomonSmithBarney (SSSB) believes European equity returns of 15%-20% are possible over the next 12 months. The prediction, according to SSSB, is underpinned by a return to the recovery valuations seen in mid-1999 leading to expectations that equities will be further re-rated against bonds. It is a view that many fund managers and economists such as Chris Tracey, economic director at JP Morgan Fleming, and Henderson Global Investors' John Botham, do not share ' both seeing more limited upside during the coming year. SSSB is favouring industrials, financials and technology stoc...