European companies likely grew earnings for the first time in five quarters, but concerns about the strength of the consumer and the economic outlook have cast a pall over the second-quarter earnings season.
“The reason Europe has had this negative price skew to earnings, which at one point was quite disproportionate to long-term history, is on the back of risk-off sentiment due to the recent market growth scare,” said Morgan Stanley chief European equity strategist Marina Zavolock, noting, however, that the negative skew was starting to abate.
“With worries about a hard landing resurfacing, poor performance for cyclicals may not be fully over,” said Barclays head of European equity strategy Emmanuel Cau. This has dashed hopes of a recovery in the world’s second biggest economy in the second half of the year. “Most sectors are seeing net downgrades at this point, but European banks and financials are still seeing net upgrades,” said Citi’s global equity strategist David Groman. “It’s one sector where earnings momentum still looks really strong compared to the rest of the market.”
ASML, Europe’s largest tech company, saw a 19% decline in net income in the quarter, but its CEO said 2024 was a “transition year” as it looked to a strong 2025.
South Africa South Africa Latest News, South Africa South Africa Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Source: ctvottawa - 🏆 29. / 67 Read more »