>>213558468European companies are falling behind their US counterparts in their second-quarter earnings, as the impact of President Donald Trump’s trade war frustrates investors who had bet heavily on a revival for the region’s stock markets.
With more than half of the companies in the Stoxx Europe 600 having reported earnings, the index is on track for no earnings growth compared with a year ago, according to Bank of America, sapping optimism over a revival in the region’s equity markets.
By contrast, the S&P 500 index’s constituents are on track to post 9 per cent year-on-year average earnings growth, according to BofA, powered largely by strong results from Silicon Valley’s tech giants and Wall Street banks.
Grant Bowers, senior vice-president at investment firm Franklin Templeton, said: “Earlier this year, there was this narrative shift that the US was going to lose its exceptionalism brand and the rest of the world would catch up.”
“But the reality is, you have to back it up with earnings and profits and economic growth,” he added. “You need the corporations to follow through — and Europe struggles to have these leading businesses.”