European Stocks Get a Reminder of Longer-Term Tariff Uncertainty
European stocks are largely shrugging off China’s retaliation to new US tariffs, but a few earnings reports today are a reminder of the longer-term uncertainty hanging over stocks.
The Stoxx 600 is pretty flat in early trading, with gains in miners and tech offsetting declines in personal care, food & beverage and real estate.
But the threat of tariffs on Europe looms large. Trump said earlier this week he will “definitely” place new tariffs on the EU, reiterating complaints about the US trade deficit with the bloc. Tariffs of 10% on European goods would lower earnings-per-share between 1% and 2%, according to Citigroup estimates.
Firms are taking not of that. This morning, Johnnie Walker maker Diageo removed its medium-term sales guidance, with the CEO saying potential US tariffs on Mexico and Canada, while anticipated, could “very well impact” momentum. Chipmaker Infineon forecast revenue ahead of analyst estimates, but the CFO warned of uncertainty due to US tariffs, which were not included in guidance and could be a negative if they escalate.
Source : Bloomberg
