Latest news with #STOXX50
Qatar Tribune
4 days ago
- Business
- Qatar Tribune
Europe Q2 earnings: Strong euro, tariff worries weigh but banks shine
Agencies European companies are proving they can just about endure U.S. import tariffs, eking out earnings growth for a fifth straight quarter, but at a slower pace than in the United States. According to LSEG I/B/E/S, second-quarter earnings are expected to have increased 3.1% from the same period a year ago. Just over half of the companies to have reported have exceeded analyst estimates, broadly in line with a typical quarter. Earnings from financials (up 11.4%) and healthcare (up 15.4%) are among the strongest growth rates but while the former is loved by investors, the latter is currently out of favour. Here are five lessons from Q2 earnings: European companies remain optimistic even though their Q2 earnings growth is substantially weaker than the big tech-powered 12% expected in the United States. 'Roughly 30% of companies have increased their guidance and very few companies downgraded guidance, which is surprisingly positive,' Maximilian Uleer, Deutsche Bank's head of European equity and cross asset strategy research, said.'We think this guidance observation is pretty important and the theme will continue as companies have better visibility on the downside risk,' Uleer added, citing the recent trade deal between the U.S. and European strategists bet that the dollar would strengthen, particularly against the euro, when the higher U.S. import tariffs kicked in. But the single currency has risen over 12% against the greenback this year and Europe's export-heavy companies have felt the pain. 'Larger companies are typically more globally diversified, they generate more revenues from outside of Europe and obviously with the euro strength, that's been a relative headwind for earnings for them,' said Rory Dowie, portfolio manager at Marlborough. Barclays and Citi estimate that, typically, a 10% appreciation in the euro results in around a 2% earnings headwind, with Citi pointing to sectors like materials and energy as the most sensitive to FX seven lenders in the STOXX 50 blue-chip index (.STOXX50), opens new tab beat expectations, and two improved their guidance. The sector index (.SX7P), opens new tab surged to its highest since 2008, as investors bet on the industry's resilience. Financials delivered the biggest positive second-quarter earnings surprise among European sectors, coming in 12% above analyst forecasts, more than twice the 5.5% rate for the broader STOXX 600 (.STOXX), opens new tab, according to LSEG I/B/E/S data. 'In Europe, banks have been the main driver of this season, whereas in other areas like autos and discretionary goods we're seeing sharp downward revisions,' said Alberto Tocchio, Head of Global Equity and Thematics at Kairos Partners. Still, after a 37% rally this year and the best three-year run since the euro's launch in 1999, some caution is creeping in. BofA has advised long-term investors to hedge exposure, warning that banks could be vulnerable if the economy slows. The European healthcare sector (.SXDP), opens new tab has posted Q2 earnings growth of 15%, second only to the technology sector, but investors are keeping their powder dry given U.S. President Donald Trump has mooted a 250% levy on pharmaceutical imports. 'We are very cautious on the sector despite the earnings growth,' said Deutsche Bank's Uleer. 'If we have certainty at some point, it's one where I could think of doing a double upgrade from underweight to overweight.' Investors are turning away from consumer stocks as weak results and cautious outlooks highlight the sector's vulnerability to tariffs and shifting spending habits. Companies from luxury to staples are struggling to balance cost pressure with fragile demand, especially in the U.S. - forcing tough decisions on pricing and strategy. 'Anyone exposed to consumption, especially services, is really being hit,' said Arun Sai, senior multi-asset strategist at Pictet, noting that the market has underappreciated how much the U.S. has already slowed. According to LSEG I/B/E/S data, earnings from consumer cyclicals such as carmakers and luxury have come in 8% below expectations, while the rate for consumer non-cyclicals such as food companies is 2%, less than half the broader market. Adidas ( opens new tab shares fell 18% over six days after it warned it may have to hike U.S. prices, while brewer AB InBev ( opens new tab fell 11% as weak Brazil and China demand hit volumes. In the luxury sector, Ferrari slumped 12% in its biggest drop ever after saying it would cut U.S. prices, while Hermes ( opens new tab shares dropped 12% over three days.
Yahoo
27-03-2025
- Business
- Yahoo
Morning Bid: Looking to April 2 with trepidation
A look at the day ahead in European and global markets from Kevin Buckland The relief rally in global stocks was still in place on Wednesday in Asia, but with dwindling conviction. It's not that there was any news - or late social media posts from POTUS himself - to change the market's outlook. It's more that the rally has been built on optimism for a softer, more flexible stance from President Donald Trump, but the uncertainty remains - the tariff deadline is still April 2, and there's still no clarity on what will or won't happen that day. As everyone knows, there's nothing markets hate more than uncertainty. MSCI's index of world equities started the week with a 1.2% rally, narrowing to a 0.3% rise on Tuesday, and just barely staying above water very early in the latest session. Japan's Nikkei, for example, began brightly with gains of 1%, but those were halved by midday. Likewise, Hong Kong's Hang Seng rose more than 1% early on, but was only up 0.3% just after noon. U.S. equity futures flipped from small gains to small losses. For now, pan-European STOXX 50 futures are signalling a 0.1% rise. To recap, Trump suggested on Monday that not all the levies he's threatened will be implemented on April 2, and "a lot of countries" could get some exemptions, without giving further details. At the same time, investors got a reminder of how erratic the trade situation can be, with the announcement of 25% tariffs on buyers of Venezuelan oil and gas. And considering Trump has dubbed next Wednesday "Liberation Day", you would think it would bring at least some fireworks. Certainly for markets, the day could be a crucial one, either signalling a more flexible approach to tariffs going forward, or confirming a hard line, and how difficult it is to read Trump's intentions. On the European data calendar, UK CPI will be closely watched, with the outlook for Bank of England interest rate cuts looking increasingly cloudy under Trump's trade war. British Finance Minister Rachel Reeves also delivers a fiscal update to parliament later today, and is set to announce an additional 2.2 billion pounds ($2.84 billion) for defence spending. France releases consumer confidence and jobs figures, and Bank of France Governor Francois Villeroy de Galhau will be quizzed about the economy by the lower house's finance commission. In the U.S., Minneapolis Fed President Neel Kashkari and St. Louis Fed boss Alberto Musalem both have public speaking engagements. Key developments that could influence markets on Wednesday: -UK CPI (February) -France consumer confidence (March), employment figures (February) -UK fiscal update -Minneapolis Fed's Kashkari, St. Louis Fed's Musalem speak at separate venues ($1 = 0.7733 pounds)
Ammon
27-03-2025
- Automotive
- Ammon
Stocks fall on Trump's auto tariffs, China bucks the trend
Ammon News - Global stocks fell on Thursday, led by heavy losses in Japan and South Korea, after U.S. President Donald Trump announced new tariffs on auto imports, with European stock futures also pointing to a lower open. Trump late on Wednesday announced plans for long-promised 25% tariffs on automotive imports. Analysts expect the move to hit European, Japanese and South Korean companies at most. European stock markets are set for a lower open, with pan-European STOXX 50 futures down 0.5% and FTSE futures 0.2% lower. In currency markets, the dollar index , which measures the greenback against six major peers, retreated 0.3% to 104.32, having hit a three-week top of 104.71 overnight. The euro touched a three-week low of $1.0731, but bounced off the 200-day moving average and was last up 0.3% at $1.0780. The yen, on the other hand, recovered some of the overnight losses and bounced 0.2% to 150.21 per dollar on Thursday. Treasury yields held steady in Asia after edging up overnight. The benchmark 10-year Treasury yields held steady at 4.3537%, having gained 5 basis points overnight. The tariff uncertainty sent gold 0.5% higher to $3,035 per ounce, not far from a record high of $3,057.
