European Outperformance Vulnerable to Earnings Slowdown
Dow Jones11-10 18:15
1015 GMT - European equities' strong performance following the U.S. midterm elections could take a hit if earnings momentum slows as a result of high energy prices, Nuveen's Laura Cooper says. European indexes have benefited as investors fleeing AI-linked stocks moved into the tech-light continent. However, earnings could become a headwind for Europe when companies become more exposed to high oil prices, Cooper says. European companies' earnings have so far been insulated from energy-price hikes as the prices they paid for oil were locked in before the war. As those hedges expire through 2027, earnings will likely take a hit, and investor enthusiasm for European stocks may wane, Cooper says.
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