(Bloomberg) — European stocks were steady ahead of a busy week for earnings. Investors remained cautious about the health of European economies and rising tensions in the Middle East.
The Stoxx Europe 600 Index was little changed as of 8:19 a.m. in London. Banks and insurers lagged, while energy stocks outperformed as oil prices rebounded from declines last week.
Among single stocks, JDE Peet’s NV soared after investment holding company JAB agreed to acquire Mondelez International Inc.’s stake in the coffee retailer. Munich Re fell after getting a downgrade.
Investors are keeping an eye on the health of major economies, with France today getting a downgrade from Scope Ratings in another warning on the state of the country’s finances. Geopolitics are also in center stage, with developments in the Middle East, the war in Ukraine, and the upcoming US election on the radar.
Disappointing results last week are also dampening investors’ sentiment. Weak earnings from the likes of ASML Holding NV will likely weigh on technology index heavyweights like SAP SE, which is due to report after teh market close today, said Joachim Klement, head of strategy, accounting and sustainability at Liberum Capital.
The upcoming US election will also keep many investors on the sidelines as the outcome remains uncertain. “Overall, it seems that investors are increasingly cautious about the medium-term outlook over the next six months,” added Klement. “Advances in selected stocks will thus be used to take profits.”
Still, the mixed start to the earnings season is not bad enough to derail the global rally in stocks because recent US data is holding up the soft landing narrative, according to Barclays strategists led by Emmanuel Cau.
European company executives are more preoccupied than their US counterparts about Donald Trump’s promise to impose tariffs on all imports if he retakes the White House, with mentions of “tariff” more frequent in European company conference calls than those in the US.
For more on equity markets:
You want more news on this market? Click here for a curated First Word channel of actionable news from Bloomberg and select sources. It can be customized to your preferences by clicking into Actions on the toolbar or hitting the HELP key for assistance. To subscribe to a daily list of European analyst rating changes, click here.
More stories like this are available on bloomberg.com
