Pratique du Shadowing: Will European Equities Outperform the S&P? - Apprendre l'anglais à l'oral avec YouTube
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This is the markets.
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This is the markets.
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I'm Chris Hussey and today is Thursday June 4th
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and I'm joined from the Goldman Sachs trading floor in London
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by Sharon Bell who is our European portfolio strategist within Goldman Sachs research.
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Sharon thanks so much for taking time with us on the markets.
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Thank you.
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So let's you know go right into your specialty which is European equities.
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Stocks are up a lot this year.
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What's driving the rally.
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Yep.
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So Europe is at close to all time highs.
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hasn't performed as well as the US or Asia
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but it's bounced a lot from the lows
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and I think the reason Europe's bounced
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so much is the earnings have been quite strong obviously the energy stocks you've seen earnings rise for energy companies
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because of higher oil and gas prices
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but it's not just energy companies the whole commodity complex is doing very well utilities mining companies for example
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but also financials with higher interest rates chemicals have been doing well in terms of earnings so
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if I look at the suite of European companies then actually earnings estimates have been upgraded on average by six
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or seven percent this year.
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You have had some downgrades but that's been in consumer discretionary areas of the market.
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But net net it's been upgrades and I think that's really driven the rally.
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Okay Sharon you mentioned a bunch of different sectors.
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You didn't really mention tech though.
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Without tech is there more to go in a European rally?
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Yeah Europe has got some tech and tech has also been seeing upgrades as well.
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It's not as big as you point out as it is in Asia
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or the US but tech is also helping to drive European earnings
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so I think
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if you look overall in Europe it's got some tech not
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as much as elsewhere it's got energy it's got other areas
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that have done reasonably well like heavy asset companies companies like
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industrials utilities energy defense aerospace companies all seeing upgrades as to
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whether you've got more to go yes we've recently upgraded our
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stock 600 forecast we're now looking WE ARE WORKING FOR 660 ON THAT INDEX OVER THE NEXT 12 MONTHS.
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THAT IS AN UPGRADE COMPARED TO PREVIOUSLY.
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THE REASON WE HAVE DONE THAT IS BECAUSE EARNINGS HAVE BEEN GOOD AND THE ECONOMY HAS BEEN MORE RESILIENT THAN EXPECTED.
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IT'S NOT AS STRONG AS YOU SEE IN THE U.S.
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BUT YOU ARE NOT IN RECESSION.
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GERMANY CONTINUES TO SPEND FISCALLY JUST AS THE PLAN WAS LAID OUT LAST YEAR.
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YOU ARE STARTING TO SEE THAT FISCAL SPEND COME THROUGH.
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here because in the U.S., of course, it's been a concentrated rally.
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You were talking about so many different parts of Europe that have been doing well.
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Is Europe less concentrated than the U.S.?
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A simple answer is yes.
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It is much less concentrated than the U.S., and you see that in a couple of different ways.
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One way, you take the top 10 companies, the largest 10 companies, in the U.S., they make up 40 percent of the index.
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In Europe, Europe's top 10 companies make up just 15 percent of the entire index market cap.
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So very, very different.
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Not only that, that 40 percent I mentioned for the U.S is a high, more or less, whereas in the case of Europe, top 10 companies make up 15 percent.
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And that's actually at the lower end of the concentration that Europe has seen historically.
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So, no, I don't think Europe is as concentrated as the U.S.
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There's another way of looking at it as well, which is what's been driving returns.
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Has it been a narrow breadth of companies or has it been a wider breadth of companies in the U.S.?
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Not only is the US market concentrated in terms of size of companies and market cap, it's also concentrated in terms of returns.
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Very few companies have driven the returns in the US.
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In Europe, it's been a bit broader.
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There has been similar themes.
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Keep that in mind that you've had energy, tech, AI, and some of the companies which have been in other sectors have been driven by those same themes.
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So industrials, utilities, for example, you need to power the AI revolution are all drivers.
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And in that sense, similar themes have driven the European market as the U.S., but it's been much less concentrated in terms of number of stocks.
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Does that lack of concentration in Europe give it more legs to a rally, or do you feel like it is too insulated from the AI trade to do that?
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I think it's not completely insulated from the AI trade.
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It's got a lot of potential there.
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it's got exposure to AI via obviously the tech companies themselves
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but also the utilities companies by the need for energy Europe is undersupplied in energy needs to improve those networks
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and grids and the companies doing
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that are great investments we think industrials this is an area
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that Europe is well known for very high quality industrials
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and their demand
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and their businesses are very much driven by AI demand data centers at the moment CapEx as well
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and And then it's not just an AI driven trade.
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You've also seen investment by Germany, for example, in more defense, more infrastructure.
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Europe generally has a lack of infrastructure and defense spending in recent years.
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So you're seeing European companies win a lot of that business and do very well.
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So I think, yes, it's not AI, it's one part of it, but it's broader than that.
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No, it is broader than that that.
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Help me understand this, because at the beginning of the call, you mentioned that while Europe is doing great, it's actually not doing as great as U.S or even Asia.
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What is your view going forward?
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Can Europe outperform?
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So it's not our view.
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Our base case is that you get positive returns from Europe, and we have upgraded our index forecast, but we would still have the U.S and Asia outperforming.
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Why is that?
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So we would have the US outperforming because it's got big hyperscalers where we're expecting pretty good returns.
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And we're looking for an economy which actually is growing quite nicely in the next couple of years in the US.
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So we do think the US market continues to outperform.
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Asia as well, we see driven by earnings, driven by the semi-stocks and driven by the tech sector.
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For Europe, it's broader.
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So you've got the diversification benefit when you invest in Europe.
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And you also have some value benefit as well.
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But I do have lower returns in Europe because the European economy is, after all, more hit by the higher energy prices.
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We don't have energy independence in the same way that, say, the U.S does.
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So I see lower returns, but still positive.
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I'm looking for about high single digits, let's say, total return for Europe in the next 12 months.
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So we're at that point in the Markets podcast where I normally ask, what's the trade?
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But you're not a trader.
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You're a strategist.
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So I'm going to ask you, what's the investment?
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Where do you want to put your money here?
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Yeah, and that's an interesting question because I think there's potential for shorter term trades and things like consumer discretionary companies.
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If and when the Straits of the Moos open and you see more flow of oil or prices come down, energy costs reduce, then I could see a bounce in some of these companies that have been sold off.
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But I think the longer term investment, which is what you're really asking me, is still in those structural winners.
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So we would call, for example, for halo stocks to do well.
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That's heavy assets, low obsolescence companies, companies that did not do well over the decade or decade and a half after the financial crisis.
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Then you want to just be purely digital assets.
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None of these heavy assets types companies, heavy capital companies think they would do well.
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And by that, I mean things like utilities,
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telecoms, industrials, even energy companies that are investing and have good assets and can make return on those assets.
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And I think Europe has a lot of those.
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I also like our renewables companies, defense companies, aerospace companies.
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I think the tech sector in Europe trades at a discount to similar companies elsewhere in the world.
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Banks as well.
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We think interest rates will be higher for longer, and that will help the bank sector.
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Okay, Sharon, what are you looking for in the summer ahead?
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I think the absolutely crucial thing for Europe particularly is a reopening of the Straits of Hormuz
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and some topping out and decline in energy prices.
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I think
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that is absolutely key keys for confidence in the economy key for investors particularly domestic investors would like to see
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that in order to start feeling more confident and buying the market.
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We've got a lot of big IPOs coming through in the U.S seeing how those are absorbed as well.
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We'll also be important for European equities.
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So the straights of the moves, those big IPOs, and of course we have an earning season coming up the second quarter.
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How have companies digested the higher energy prices?
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What's their resilience like?
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Those will all be absolutely crucial for Europe.
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Okay.
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One last question for you Sharon.
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Can England win the World Cup?
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Well we have a 5% chance of England winning the World Cup.
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Our economists, not me, our economists crunched all the data.
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They put Spain as the likely winners.
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So European European country.
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So they put Spain I think it's 25 or 26 percent chance of Spain winning.
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Then France.
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Unfortunately England my home 5 percent chance haven't won since 1966 but you never know.
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Well I do know it's going to be Argentina.
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But Sharon thanks so much for taking the time with us here on the markets.
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That's great thank you.
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That does it for this week's episode of the markets.
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I'm Chris Hussie.
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listening.
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nor any of its affiliates make any representations or warranties expressed
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or implied as to the accuracy or completeness of the statements
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or information contained herein and disclaim any liability whatsoever for reliance on such information for any purpose.
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Each name of a third-party organization mentioned is the property of the company to which it relates, is used here strictly for informational and identification purposes only,
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and is not used to imply any ownership or license rights between any such company and Goldman Sachs.
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A transcript is provided for convenience and may differ from the original video or audio content.
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Goldman Sachs is not responsible for any errors in the transcript.
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This material should not be copied, distributed, published, or reproduced in whole or in part, or disclosed by any recipient to any other person without the express written consent of Goldman Sachs.
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Copyright 2026, Goldman Sachs.
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All rights reserved.
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Context & Background
In this enlightening discussion, Chris Hussey, an expert in market analysis, converses with Sharon Bell, a European portfolio strategist at Goldman Sachs. The focus of their dialogue is the performance of European equities in relation to the S&P 500. Sharon provides insights into the driving forces behind the recent rally in European stocks, highlighting sector performance and economic resilience. This conversation offers a vivid window into financial discourse, showcasing how professionals analyze market trends and articulate their thoughts.
Top 5 Phrases for Daily Communication
- “Stocks are up a lot this year.” - A way to express significant changes in market performance.
- “Earnings have been quite strong.” - Useful to discuss financial health in various sectors.
- “Earnings estimates have been upgraded.” - A phrase commonly used in finance to indicate positive revisions of expected profits.
- “You are not in recession.” - An important statement reflecting economic stability.
- “Europe is less concentrated than the U.S.” - A comparative phrase that highlights distinctions in market composition.
Step-by-step Shadowing Guide
If you're looking to enhance your English speaking practice through this video, consider using the shadowing technique. This approach will help you improve English pronunciation and boost your overall language skills. Here’s a step-by-step process to effectively incorporate the shadow speech method with this transcript:
- Listen Attentively: Start by listening to the video without distractions. Focus on the tone and rhythm of the speakers.
- Chunk the Speech: Divide the transcript into smaller sections. For example, take one phrase at a time to ensure understanding.
- Repeat and Imitate: Play a segment of the video, pause, and then repeat what you heard in the same intonation and pace. Try to mimic the pronunciations and inflections of Chris and Sharon.
- Record Yourself: Use your smartphone or a voice recorder to capture your voice. This helps in identifying areas for improvement in pronunciation and rhythm.
- Review and Refine: Listen to your recording while following along with the original transcript. Note any differences and areas where you can enhance clarity.
By utilizing these steps, you can effectively engage with the content and make remarkable strides in your English speaking ability. Remember, practice is key, and consistency will lead to improvement in your shadowing technique.
Qu'est-ce que la technique du Shadowing ?
Le Shadowing est une technique d'apprentissage des langues fondée sur la science, développée à l'origine pour la formation des interprètes professionnels. Le principe est simple mais puissant : vous écoutez de l'anglais natif et le répétez immédiatement à voix haute — comme une ombre suivant le locuteur avec un décalage de 1 à 2 secondes. Les recherches montrent une amélioration significative de la précision de la prononciation, de l'intonation, du rythme, des liaisons, de la compréhension orale et de la fluidité.
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