LIVE MARKETS-Earnings season halfway score: US leaves Europe far behind

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EARNINGS SEASON HALFWAY SCORE: US LEAVES EUROPE FAR BEHIND

We are deep into the third-quarter earnings season, and with over half of U.S. and European firms having reported, the main takeaway is that results are well ahead of expectations.

But there are stark geographical differences.

In the United States, earnings growth is running at 16%, with a 83% of S&P 500 .SPX companies beating EPS forecasts, according to Morgan Stanley strategists. Tech, financials and communication services are leading, while consumer sectors remain softer. Revenue growth is also ahead at 9%.

Europe, by contrast, is delivering more modest numbers. Among STOXX 600 .STOXX firms that have reported, 56% topped EPS estimates, but the overall growth is just 1%, per MS, with consumer and commodity sectors weighing on performance. Revenue is negative at -1%.

Japan sits in somewhere in the between, with Topix .TOPX companies posting 14% EPS growth.

Even as the U.S. leads, the strategists say Europe could see a stronger recovery as we move into 2026, supported by "a turn in China and better domestic activity momentum".

(Danilo Masoni)

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