Europe open: Stocks edge up as investors mull US earnings

by | Jul 20, 2023

(Sharecast News) – European stocks edged higher in early trade on Thursday, as investors mulled the latest earnings from Tesla and Netflix.
At 0925 BST, the benchmark Stoxx 600 index and Germany’s DAX were up 0.2%, while France’s CAC 40 was 0.4% higher.

Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, said: “Although Tesla’s profits beat Wall Street expectations for Q2 thanks to sales volumes due to its cut-price strategy on key models, the lack of detail surrounding the production of the much-heralded Cybertruck disappointed investors.

“Netflix super-charged its subscriber base but its revenue in Q2 didn’t meet analysts’ forecasts, leading to a slide in the share price in after-hours trading.

“Concerns are growing that a slowing economy, combined with the erosion of lockdown savings will weigh further on spending on discretionary goods and services, particularly big-ticket items like cars and nice to have but not necessary streaming accounts in the months ahead.”

In European equity markets, Publicis rallied as the French advertising giant upgraded its 2023 guidance despite “persistent macro uncertainties”.

Hikma Pharmaceuticals surged, with traders pointing to news that a major Pfizer injectables plant in North Carolina was hit by a tornado and heavily damaged on Wednesday. Traders said that according to Bloomberg TV, the production that will be lost from the Pfizer plant can likely be replaced by Hikma, which produces the same injectables.

Elsewhere, shares of Swedish health and hygiene products group Essity slumped after its second-quarter core earnings missed expectations.

Budget airline easyJet flew lower despite saying it swung to a pre-tax profit in the third quarter amid strong passenger demand, and that it expects to post record profit for the fourth quarter.

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