LIVE MARKETS-Looking though the noise

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LOOKING THOUGH THE NOISE

The week has seen lots of moving parts but the overarching theme in Europe is one of new records and continued outperformance.

The STOXX 600 .STOXX, DAX .GDAXI and FTSE .FTSE have all hit fresh peaks in a week when the Nasdaq 100 .NDX suffered a daily drop of 3% due to the emergence of low-cost AI platform DeepSeek.

For the week, the STOXX 600 .STOXX is up over 2% versus a 0.5% drop for the S&P 500 .SPX.

"DeepSeek bursting onto the scene this week has quite rightly caused a jolt to the collective group-think that Big Tech is a one-way trade," Barclays strategists write.

There are also possible tariffs on the horizon, but European shares in 2025 are so far dealing with the threats.

"Beyond the noise, rates and earnings fundamentals are going in the right direction," Barclays says.

"Although they remain at a high level, stabilizing rates help temper inflationary concerns from Trumponomics, and have also contributed to calm equity volatility," they say.

While earnings season is still in its infancy, results are looking positive so far.

"Early results from earnings season are showing a benefit from weaker euro, helping Europe's EPS revisions recover," Barclays adds.

Next week, healthcare and financial stocks dominate earnings, with Novo Nordisk NOVOb.CO, AstraZeneca AZN.L, UBS UBSG.S, Santander SAN.MC and BNP Paribas BNPP.PA all due to report.

(Samuel Indyk)

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