Investors take a cautious approach
European stock markets are around 1% lower at the start of the week, as earnings season makes investors a little more cautious.
Risk appetite was put to the test last week as earnings season got underway and banks made huge loan-loss provisions linked to the coronavirus outbreak and lockdown that followed. This is the first real insight we’ve had into the impact on companies bottom lines and the initial readings are ugly. Investors have given a free pass to the data until now, they may not be so forgiving in the coming weeks.
We’ve seen a strong rebound in equity markets prior to last week so it wasn’t really surprising to see some profit taking. It’s now a question of how keen investors will be to jump back in. The next couple of days could give an indication of how investors will approach this earnings season and whether they’ll take a step back, as they appeared to last week.
While the numbers on the economy are grim and are…