What to Look For in Europe’s Second Quarter Earnings
- Forward-earnings multiples have jumped 7.4% since December
- Equity valuations now fair, putting focus on earnings: Allianz
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In the first quarter, upbeat results from European companies dispelled years of gloom and spurred investors to scoop up stocks they saw as cheap. Traders will be harder to impress this time round.
The second-quarter earnings season about to kick off has a hard act to follow: in the first three months of the year, profits increased by the most in more than six years, JPMorgan Chase & Co. estimates show. Aided by receding political risks and stronger economies, those results lifted the Euro Stoxx 50 Index’s forward earnings multiple by 7.4 percent from a December low. With equities now more expensive, investors are stressing the need for another solid quarter for the market to sustain its year-to-date gains.