LIVE MARKETS-Vague guidance shields stocks from tariff tumble

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VAGUE GUIDANCE SHIELDS STOCKS FROM TARIFF TUMBLE

The European earnings season is off to a decent start, but when it comes to the outlook comments, Morgan Stanley has uncovered an interesting dynamic.

According to the U.S. investment bank, firms that provide vague guidance on challenges such as tariff effects are seeing relatively smaller price moves compared to those that provide detailed warnings about future demand risks.

This trend suggests that "less is more", write MS strategists in their latest take on the Q1 season.

More interestingly, perhaps, is that this appears to be slowing the pace of cuts in analyst estimates.

"This Catch-22 dynamic may be slowing the extent of consensus declines somewhat," they note.

More broadly, MS says a net 23% of companies have beat on first quarter earnings so far with 34% of companies having reported: "This remains a healthy skew to EPS (earnings per share) beats".

(Danilo Masoni)

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