LIVE MARKETS-Positive earnings revisions, EPS upgrades fuel STOXX strength
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POSITIVE EARNINGS REVISIONS, EPS UPGRADES FUEL STOXX STRENGTH
We are almost seven weeks into 2025, and the STOXX 600 has hit another fresh record high, up 9.4% year-to-date and eclipsing this year's 4% move higher in the U.S' S&P 500.
Bank of America's most recent fund manager survey found that investors expect this trend to persist, with respondents more bullish on EU equities - not just outright - but also relative to the U.S.
Overall, 66% of participants expect further near-term gains for European equities from their current all-time high - rising from 44% last month - and a net 76% project upside over the coming twelve months, up from 56% last month.
The BofA survey found 55% of investors expect further increases for European equities to be driven by earnings upgrades.
Around half of companies have reported Q4 results so far this earnings season, and so far things are looking quite good.
Citi research analysts also cite positive earnings revisions, which have picked up steam during Q4 earnings, as a driver of the rally in European stocks.
Citi says the recent strength in earnings revisions - which it measures with its proprietary Earnings Revisions Indices (ERI) - is important for two reasons.
"First, European revision trends look more impressive than in the US. Second, upwards revisions have been meaningfully stronger than seasonal patterns would predict," they wrote in a note on Tuesday.
"Historically, this has also translated to MSCI Europe ex UK gaining c5% on average, keeping pace with US equities over the next 6m," they write.
(Lucy Raitano)
EARLIER ON LIVE MARKETS:
COULD PEACE IN UKRAINE LOWER THE HEAT ON THE EURO FROM TARIFFS? CLICK HERE
IS NOW FINALLY THE TIME FOR TELECOMS? CLICK HERE
NEW RECORD HIGHS, WITH A BIT OF RED CLICK HERE
BEFORE THE BELL: EUROPE NEAR PEAKS, DEFENCE IN DEMAND CLICK HERE
ARMS STOCKS SOAR AHEAD OF UKRAINE PEACE TALKS CLICK HERE
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