European Equities: Can Earnings Support a Bullish Start to the Week?

With the economic calendar on the lighter side. The focus will be on corporate earnings and Brexit… A softer EUR would likely be welcomed.
Bob Mason
List of stock market indices

Economic Calendar:

Tuesday, 23rd April

Eurozone Consumer Confidence Flash

Wednesday, 24th April

German IFO Current Conditions

German IFO Expectations

German IFO Business Climate

Thursday, 25th April

N/A

Friday, 26th April

French Jobseekers Total

The Majors

The European major enjoyed a shortened week last week, with the DAX gaining a further 1.85% to rise by 6% for the current month.

The CAC and EuroStoxx600 also saw decent gains, rising by 1.41% and 0.92% respectively.

Driving the majors through the week were positive earnings results, progress on trade talks between the U.S and China and better than anticipated economic data out of China.

The stats overshadowed disappointing manufacturing PMI numbers out of both France and Germany.

With the last set of stats that the markets digested being April’s private sector PMI numbers released last Thursday, the majors will need support to maintain the upward trend at the turn of the quarter.

While the European markets were closed on Monday, the U.S markets reopened following Friday’s holiday.

The Dow fell by 0.18%, while the S&P500 NASDAQ managed to recover early losses to end the day in the green. The NASDAQ ended the day up 0.22%, with the S&P500 up by 0.10%.

The Day Ahead

Economic data scheduled for release through the day is on the lighter side today. From the Eurozone, flash consumer confidence figures are due out this afternoon, which will provide some support late in the session.

Continued hopes of a trade agreement between the U.S and China will likely provide support through the early part of the day.

One curveball that remains for the majors is the threat of U.S tariffs on EU goods and there is always the risk of a breakdown in talks between the U.S and China.

Barring an unexpected geopolitical event, the focus through the day will be on corporate earnings. It’s a busier week on the earnings calendar.

On the earnings front, the following U.S companies are scheduled to release their earnings results today: The Coca-Cola Co., Lockheed Martin Corp., The Procter & Gamble Co., Twitter Inc., and Verizon Communications Inc.

At the time of writing, the European futures were bucking the trend early on. The DAX30 was up 56.5 points, while the CAC40 was pointing to an 18 point gain at the open.

In stark contrast, the Dow Mini was down 92 points, with the NASDAQ down by 38.5 points. With the earnings calendar particularly busy this week, we can expect some apprehension going into each session.

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