France: A Standout Short?
The French stock market looks very vulnerable, especially relative to euro area peers.
France’s economic and asset price outperformance since 2004 was supported by a much more explosive credit boom compared to Italy and Germany.
But that boom has ended and is now reversing: investors should expect France’s asset price performance to also sharply correct.
France has already warned that it will likely miss its budget deficit goals for 2013 and will likely unveil pessimistic growth targets before its April 15th deadline. This may serve as the trigger for a long underperformance phase for French assets.
Source: BCA Research
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