Latest news with #Stoxx600
CNBC
12 hours ago
- Business
- CNBC
Tariffs are hitting European firms hard. Here are the sectors to watch as earnings kick off
U.S. President Donald Trump's tariff policies are dominating attention ahead of the second-quarter earnings season, especially in Europe, where five companies worth over 50 billion euros ($58 billion) are due to report this week. Earnings estimates for companies around the world have fallen sharply in recent months as analysts attempt to predict the potential impact of the duties. Earnings per share across Europe's benchmark Stoxx 600 are expected to fall 0.2% on an annualized basis in the second quarter, according to LSEG I/B/E/S research. On April 1, ahead of Trump's so-called "Liberation Day," analysts expected 7.2% growth. If the revised expectations play out, this will mark the first period of negative earnings performance across the index since the second quarter of 2024. Expectations for European earnings have fallen more sharply than for those in the U.S. — across the S & P 500 , earnings per share are seen growing 5.8% on the year, down from expectations of just over 10% at the beginning of April. Analysts at Bank of America have flagged the strength of the euro in recent months as another risk to earnings performance. Amid dollar weakness, the euro has risen over 8% versus the greenback since the start of April. In a note to clients, BofA said earnings in sectors with high U.S. sales exposure, including consumer firms, pharma and media companies, were most likely at risk of a forex hit. Here are three key sectors analysts are watching as Europe's largest companies prepare to report. Energy Earnings across the energy sector are seen falling by over 15% in the second quarter, according to LSEG estimates. That marks a sharp drop in expectations over the course of the year, with analysts expecting over 10% growth on Jan. 1. The sector is also set to be a key drag on the Stoxx 600, with analysts at Deutsche Bank saying it is expected to be the main negative contributor to earnings. According to its research, released on June 25, overall earnings would have been forecast to rise narrowly this quarter, if the energy sector were excluded. Key for energy stocks has been a drop in crude prices, despite a fleeting uptick in June as conflict in the Middle East dominated headlines. Throughout the second quarter, Brent crude prices fell over 9%, and much of the quarter saw prices below that level, before Israel launched strikes against Iran . However, oil and gas stocks rebounded sharply from their lows after Trump's tariff announcement, with the Stoxx 600 Oil & Gas index now above its April 1 level. The first of Europe's major energy players will report next week, with Equinor due to release results on Wednesday, July 23, and TotalEnergies following the next day. Cyclical consumer It's also expected to be a downbeat quarter for some of Europe's consumer-facing companies, as concerns over the health of global demand and dollar weakness hit the sector outlook. According to analyst estimates compiled by LSEG I/B/E/S, cyclical consumer earnings are forecast to slide 24.1% this quarter. The figure compares to a decline of just over 5% that had been projected at the start of April. Consumer companies will also be a key area of focus for earnings season in the U.K. Analysts at Deutsche Bank have flagged the consumer discretionary sector as a likely drag on earnings in the more domestic-focused FTSE 250 index, and say the potential for a tariff-driven fall in consumer demand could create uncertainty. Commentary across consumer companies will be key as investors look to assess the impact of tariff policies. While only a small number of companies in the U.K. reported results in the first quarter (as the companies tend to report semi-annually), Deutsche Bank research still found companies citing direct tariff impacts. We'll get a first check on the consumer sector with key luxury stocks reporting next week, including Christian Dior and sector bellwether LVMH on Wednesday. Financials Analysts will be closely tracking the performance of Europe's banking and financial services companies in the second quarter, after five straight quarters of double-digit earnings-per-share growth. This earnings season, performance is expected to be more subdued, with growth of just under 2% expected, according to LSEG I/B/E/S data. Bank of America analysts noted that the banking sector has been a major support to European earnings in recent quarters, which could make its performance this year even more noteworthy. Earnings season will also pose a key test to the sector after a rapid run-up in valuations. Europe's Stoxx 600 Banks index just posted its best first half of the year since 1997, on the back of earnings outperformance in the first quarter and hopes of deal-making in the sector. Europe's major lenders will begin to report next Thursday, when we'll hear from Lloyds Bank in the U.K., and French lender BNP Paribas .
Business Times
3 days ago
- Business
- Business Times
Europe: Stocks down with bank and healthcare drag, US-EU tariffs in focus
[BENGALURU] European shares closed lower on Friday (Jul 11), as losses in banks and healthcare stocks weighed at the end of a week marred by US President Donald Trump's tariff announcements, with the European Union (EU) also awaiting a letter on levies from Trump. The pan-European Stoxx 600 index closed 1 per cent lower, snapping a four-day win streak and clocking its biggest single-day decline in over three-months. Germany's DAX and Britain's FTSE both came off their record high levels seen this week to fall 0.8 per cent and 0.4 per cent, respectively, on Friday. The EU initially hoped to strike a comprehensive trade agreement with the US, including zero-for-zero tariffs on industrial goods, but months of difficult talks have led to the realisation it will probably have to settle for an interim agreement and hope something better can be negotiated. 'We had expected it to be approved on Wednesday, so the longer this drags on, the more we worry that Trump isn't on board, and the EU could get hit with significantly higher tariffs yet again,' TD Securities analysts said in a note. HSBC estimates that a 10 to 20 per cent hike in import tariffs by the US on regional goods could suppress the overall revenue of the FTSE Europe index by 1.2 per cent-2.4 per cent and the net income in the range 4 to 6 per cent. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Risk sentiment took a hit globally after Trump announced a 35 per cent tariff rate on all imports from Canada from Aug 1 and floated a blanket 15 per cent or 20 per cent tariff rate on other countries, up from the current 10 per cent baseline rate. European banks were at the forefront of the selloff with a 1.8 per cent fall. Norway's largest bank DNB lagged with an 8.8 per cent slide after reporting an earnings miss for the second quarter, hit by weaker than expected interest income and higher loan losses. Healthcare stocks, which hold a weight of more than 12 per cent on the Stoxx, also saw heavy losses on Friday with Danish drugmaker Novo Nordisk down 3.6 per cent. A rare bright spot was energy, with shares of BP up 3.4 per cent after the British oil giant said its second quarter upstream output is set to be higher than previously forecast. Despite Friday's losses, most European blue-chip bourses clocked weekly gains in excess of 1 per cent. Automobiles and mining stocks were the top performing sectors in Europe this week and telecoms the worst. Global investors have been on edge as Trump has broadened his trade war this week, setting new tariffs on a number of countries, along with a 50 per cent tariff on copper. In other single stock news, Gjensidige Forsikring rose 7.8 per cent to a record high after the Norwegian insurer reported better-than-expected top-line results for the second quarter. REUTERS
CNBC
3 days ago
- Business
- CNBC
European stocks head for lower open, with EU tariff letter expected from White House
The pan-European Stoxx 600 index notched a fourth daily gain on Thursday, but IG futures are pointing to a broadly negative open for major bourses on Friday. The big news overnight is that U.S. President Donald Trump will lift tariffs on imports from Canada to 35% from Aug. 1, and warned that the duty might be increased if Ottawa retaliates. The rate is separate from sectoral tariffs placed on steel, aluminum and autos, and shortly copper. Investors are also standing by in anticipation of the release of a letter from Trump in which he is expected to outline tariffs the European Union will face, after he told NBC News that he would be issuing tariffs "over the next couple of hours" to both the EU and Canada. — Jenni Reid, Michael Considine
Business Times
4 days ago
- Business
- Business Times
Europe: Mining, healthcare prop up shares; US-EU trade talks in focus
EUROPEAN shares closed higher on Thursday, with mining and healthcare stocks the biggest boosts as investors watched for signs of progress on a potential trade deal between the United States and the European Union. The pan-European Stoxx 600 index closed 0.54 per cent higher at 552.93, hitting its highest since June 11. In the UK, the blue-chip FTSE 100 jumped 1.2 per cent to an all-time high, while Germany's DAX came off its record high to end 0.4 per cent lower. European Commission President Ursula von der Leyen said the EU is working 'non-stop' to reach a low-tariff trade agreement with the US. EU trade chief Maros Sefcovic said on Wednesday that good progress has been made on a framework trade agreement, and a deal may be possible within days. The negotiators are also discussing potential measures to protect the EU auto industry, according to officials and auto industry sources. European auto stocks climbed 2 per cent, with shares of Germany's BMW up 4.2 per cent after the automaker held a well-received pre-close earnings call. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up 'The frequency of tariff-related news is on the rise again, and this crescendo of trade influences is likely to persist in the coming days, impacting markets directly affected by these developments,' Jochen Stanzl, chief market analyst at CMC Markets, said. US President Donald Trump announced a new 50 per cent tariff on copper imports and a 50 per cent duty on goods from Brazil on Wednesday, both effective from Aug 1. European mining stocks jumped 3.2 per cent to a more than three-month high, with London-listed shares of Glencore and Rio Tinto advancing about 4 per cent each. Heavyweight healthcare stocks also gained 1.8 per cent, with Danish drugmaker Novo Nordisk up 2.8 per cent. The stocks reeling on Thursday were mostly banks, with a gauge for euro zone lenders down 1.6 per cent, though still hovering near its highest level since 2010. At the bottom of the Stoxx 600 was Barry Callebaut, down 13.4 per cent after the Swiss chocolate maker cut its volume outlook for the third time this year. Grafton shed 6.1 per cent after the building materials distributor and DIY retailer said it is not expecting a 'significant' increase in volumes this year. In contrast, Aalberts rose 7.1 per cent after the Dutch industrial group agreed to acquire Grand Venture Technology. Investors are now bracing for the second-quarter earnings season to assess how companies are navigating trade volatility. The world's biggest supplier of computer chip-making equipment, ASML, will be the first of the European heavyweights to report earnings next week. REUTERS
Bloomberg
5 days ago
- Business
- Bloomberg
European Stocks Gain as UniCredit Rally Lifts Banks; WPP Sinks
European stocks rose for a third day, with banks leading gains on the back of a rally in UniCredit SpA, while advertising group WPP Plc sank 19% after it tempered its revenue outlook. The Stoxx Europe 600 Index gained 0.8% by the close in London. UniCreditadvanced 4.6% after it doubled its equity stake in German rival Commerzbank AG to about 20%, fueling renewed speculation around potential banking deals in Europe. The Stoxx 600 Banks Index rose 2.0%.
