2024-10-21 23:48:47 :
(Bloomberg) — European stocks fell at the start of a busy week of earnings reports. Investors remain cautious about the health of the European economy and growing tensions in the Middle East.
The Stoxx Europe 600 index fell 0.5% as of 12:41 pm in London. Real estate, consumer goods and services stocks were the worst performers, while energy stocks outperformed as oil prices rebounded from last week’s losses. Miners were supported by gains in iron ore and base metals prices after Chinese banks cut benchmark lending rates more than expected.
Among stocks, JDE Peet’s NV jumped after investment holding company JAB agreed to buy Mondelez International Inc.’s stake in the coffee retailer. Munich Re fell after a rating downgrade and Sandvik AB fell after missing operating profit expectations. SGS SA and Intertek Group Plc were also among the worst performers on the Stoxx 600 after analysts at Royal Bank of Canada downgraded the companies, citing greater caution in the testing, inspection and certification industry. .
Investors are keeping a close eye on the health of major economies, with France’s rating downgraded by a range rating in another warning about the country’s fiscal health. Geopolitics is also in focus, with developments in the Middle East, the war in Ukraine and the upcoming US election all coming under scrutiny.
Last week’s disappointing results also cast a shadow on market sentiment. Joachim Klement, head of strategy, economics and ESG at Panmure Liberum, said weak earnings from companies such as ASML Holding NV could put pressure on tech index heavyweights such as SAP SE, which will report after the close today.
JPMorgan strategists said negative earnings revisions and weak first-quarter results in the third quarter suggested the rally in cyclical stocks may be running out of steam, further fueling that view.
Next month’s U.S. election will also keep many investors on the sidelines as the outcome remains uncertain.
European company executives are more focused than their U.S. counterparts on Donald Trump’s pledge to impose tariffs on all imports if he returns to the White House, with European companies mentioning “tariffs” more frequently on conference calls than their U.S. counterparts .
“Overall, investors appear to be increasingly cautious about the medium-term outlook for the next six months,” Panmure Liberum’s Clement said. “As a result, gains in selected stocks will be used to take profits.”
More information about the stock market:
Do you want more news about this market? Click here for a curated First Word channel of actionable news from Bloomberg and select sources. It can be customized to your liking by clicking “Actions” on the toolbar or asking for help by hitting the “Help” key. To subscribe to a daily list of analyst rating changes for Europe, click here.
More stories like this can be found at Bloomberg.com
Follow us On Social Media Twitter/X
