Europe lower as earnings season comes into focus
It’s been a slightly negative end to the week in Europe, with indices marginally in the red, while US futures are once again looking mixed as we await more earnings reports.
Earnings is very much front of mind right now, with central banks around the world having adopted a far more dovish approach in anticipation of a slowdown and some countries in Europe either in or bordering on recession. The US has got things off to a strong start against quite low expectations which has lifted equity markets there into record closing territory. The challenge is likely to be greater across Europe though, as the next few weeks may highlight.
Two banks that have suffered greatly over the last decade – RBS and Deutsche Bank – are the worst performers in their respective indices on Friday after they saw their share price slide in early trade despite reporting stronger than expected profits for the first quarter. RBS came under pressure after warning about the impact of Brexit uncertainty on the outlook while Deutsche’s results come at the end of a rotten week for the bank as it abandoned merger talks with Commerzbank.
The Spanish IBEX is one of the worst performers in Europe this morning ahead of the general election this weekend that is expected to deliver no majority government, which means potentially weeks of negotiations before the formation of another coalition government.