LIVE MARKETS-Too soon for France turmoil to impact Q2 - RBC Wealth Management
NIKE, Inc. Class B NKE | 78.91 79.16 | +0.08% +0.32% Pre |
JD.com, Inc. Sponsored ADR Class A JD | 41.64 43.25 | +4.36% +3.87% Pre |
Dow Jones Industrial Average DJI | 42387.57 | +0.65% |
S&P 500 index SPX | 5823.52 | +0.27% |
NASDAQ IXIC | 18567.19 | +0.26% |
Welcome to the home for real-time coverage of markets brought to you by Reuters reporters. You can share your thoughts with us at markets.research@thomsonreuters.com
TOO SOON FOR FRANCE TURMOIL TO IMPACT Q2 - RBC WEALTH MANAGEMENT
Things have been holding up ok in stock markets lately, with the STOXX 600 just 2.1% below its intraday high, despite unfolding political uncertainty in France and increasing trade tensions between China and the West.
According to Frédérique Carrier, head of investment strategy for RBC in the British Isles and Asia, these factors are not really a threat to Q2 earnings.
"We expect Q2 European earnings to show an improvement over Q1 numbers. An economic recovery, though muted, is taking hold. Real wages are improving as inflation has fallen, labour markets are strong and the ECB has started easing its monetary policy," said Carrier.
China's economic recovery should also help, and overall her team expects low single digit earnings growth for the region this year.
"We think it is too soon for the political uncertainty in France to have had an impact on Q2 earnings but we recognise that it may weigh somewhat on consumer confidence going forward," she said.
However, political gridlock or financial markets volatility could slow the improvement in consumer confidence.
"We do not expect the trade spat with China to have come in the way of Q2 earnings either, though over time we would expect Europe to raise some trade barriers gradually," said Carrier.
Electric vehicles and renewables will likely bear the brunt of this.
(Lucy Raitano)
*****
FRIDAY'S OTHER LIVE MARKETS POSTS:
FRENCH ELECTION SCENARIOS CLICK HERE
STOXX 600 UP, CAC 40 DROPS BEFORE ELECTION CLICK HERE
EUROPEAN EQUITY FUTURES HIGHER CLICK HERE
ALL ROADS LEAD TO THE DOLLAR CLICK HERE