The aggregate growth forecast for the STOXX 600 index dipped slightly from 21% to 20.7% this week, yet revenue expectations climbed to 11%. This resilience is driven by the energy sector, where forecasts for profit growth jumped to 124% as supply disruptions linked to the Iran war and attacks on Russian refineries push prices higher. Simultaneously, the technology sector saw its outlook rise to 32.7%, buoyed by strong performances from ASML and Ericsson.
Conversely, the consumer cyclicals sector has collapsed. Analysts now anticipate a 2.6% decline in earnings, a staggering reversal from the 26% growth predicted just one week ago. Volkswagen and BMW provided the primary catalyst for this shift, reporting their sharpest delivery drops in years amid cratering demand in China. Michael Field, equity strategist at Morningstar, warned that this dichotomy will define the reporting season as firms exposed to weak sentiment struggle to compete with those benefiting from market volatility. Investors now turn their attention to upcoming reports from SAP, ABB, and Barclays to gauge the depth of these regional headwinds.
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