European Stocks Slip as Earnings Wave Hits
Investing.com – European stocks opened in the red on Thursday, as the recent rally stalled and investors continued to digest a slew of first-quarter earnings reports from major corporations.
At 09:00 a.m. European time, Germany’s DAX was down 0.3%, France’s CAC 40 was down 0.5%, while the UK’s FTSE 100 was flat.
Rally Paused Amid Recession Fears
Europe’s major indexes had rallied sharply in the previous session, buoyed by optimism surrounding easing US-China trade tensions. However, the bullish momentum is fading as investors remain cautious about the risk of a global recession.
According to experts at Deutsche Bank, the market is not yet fully pricing in the risk of a recession, especially when the decline in stocks and credit spreads are still quite limited. “If the new tariffs are actually applied after the 90-day extension, the market could see further downward pressure,” Deutsche Bank warned.
Data Highlight: Germany’s Ifo Index
Today, all eyes will be on Germany’s Ifo Business Confidence Index, which is expected to show a decline in business sentiment – something that could be reflected directly in the main indicators.
Earlier, the S&P Global Eurozone PMI also fell from 50.9 to 50.1 – indicating that business activity is approaching stagnation.
Earnings flood
European earnings season is in full swing, with big names hitting the market one after another:
STMicroelectronics (EPA:STMPA) forecasts better-than-expected Q2 results, calling Q1 the “bottom” of the year.
Unilever (LON:ULVR) beats underlying revenue growth expectations and keeps its 2025 outlook unchanged.
Renault (EPA:RENA) reports 0.6% revenue rise thanks to recent product launches.
BNP Paribas (OTC:BNPQY) delivers Q1 profit in line with expectations despite economic uncertainty.
Nestlé (SWX:NESN) reports better-than-expected organic sales growth, but remains cautious about the indirect impact of tariffs.
Roche (SWX:ROG) sales up 7%, helped by cancer and allergy drugs.
Meanwhile, Nokia (HE:NOKIA) disappointed with lower-than-expected profit and was hit by supply chain disruptions due to US tariffs.
Oil prices rebound slightly after sell-off
Oil prices edged up slightly after falling sharply in the previous session. At 09:15 a.m. CET:
Brent crude rose 0.8% to $62.75 a barrel
WTI rose 0.7% to $66.58 a barrel
Earlier, Reuters reported that some OPEC members were planning to raise output in June, which would put pressure on oil prices amid trade wars and oversupply risks.
The U.S. Energy Information Administration (EIA) also reported a 244,000 barrel increase in crude oil inventories last week, versus expectations for a 770,000 barrel decrease.
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