European Equities Extend Run-Up as Banks Surge, Earnings Season Looms Large
LONDON | FRANKFURT | PARIS — 10 July 2025 — Europe’s stock markets notched another advance on Wednesday, pushing the region-wide benchmark to a four-week high and leaving investors to weigh looming second-quarter results against fresh trade and policy headlines.
Index Check<br>(9 July closing levels)
| Index | Level | Δ Day | YTD |
|---|---|---|---|
| STOXX 600 | 548.1 | ▲ 0.8 % | ▲ 8 % Reuters |
| DAX 40 | 24 073 | ▲ 1.2 % — back within 0.5 % of last month’s record Morningstar | |
| CAC 40 | 8 015 | ■ 0.0 % — lagging peers amid post-election jitters Reuters | |
| FTSE 100 | 8 230 | ▲ 0.2 % — aided by softer sterling Reuters | |
| FTSE MIB (Italy) | 36 840 | ▲ 1.6 % — highest since 2007 on bank rally Reuters |
Euro Stoxx 50 futures were little changed in early 10 July trade.
Movers & Themes
Banks & Defence carry the tape – Euro-zone lenders jumped 2.7 % to a 15-year top, led by UniCredit +4.6 % after doubling its Commerzbank stake, while the pan-EU defence index hit an all-time high on renewed spending hopes. Reuters
Luxury & advertising diverge – EssilorLuxottica +5.6 % soared on reports Meta bought a 3 % holding, but WPP –18.8 % cratered after a surprise profit warning and the appointment of Microsoft’s Cindy Rose as incoming CEO. ReutersFinancial Times
Mid-cap headlines – UK recruiter PageGroup restored guidance at £22 m, signalling tariffs’ impact may be stabilising. Reuters
Central-Bank Signals
- ECB Chief Economist Philip Lane said the Bank is now monitoring non-tariff security risks and capital-flow curbs alongside classic trade frictions, reinforcing bets that policy will stay data-dependent after June’s hold. Reuters
- The Bank of England relaxed high loan-to-income mortgage caps, potentially freeing capacity for 36 000 extra UK first-time buyers each year—another tail-wind for domestic lenders. The Guardian
Street Talk
Barclays lifted its STOXX 600 year-end target to 570 (6 % upside) on “accommodative policy and calmer geopolitics,” even as consensus earnings-growth forecasts have slipped to 3 % for 2025. ReutersReuters
Analysts warn guidance, not beats, will drive price action: Q2 earnings are now seen -0.2 % YoY, down from +2.2 % in Q1. Reuters
Trade & Macro Backdrop
Markets shrugged at President Trump’s latest threat of 50 % copper tariffs and still-possible levies on semiconductors and pharma, betting the EU will strike a partial accord before the 1 August deadline. Reuters
The euro hovered near $1.17, its month-high, as investors digest the dollar’s tariff-driven retreat—posing a mild head-wind for exporters but easing imported inflation. Reuters
What’s Next
| Date | Catalyst | Market Focus |
|---|---|---|
| 15 Jul | Euro-area June CPI (final) | Inflation trajectory vs. ECB tone |
| 23 Jul | LVMH H1 results | Luxury bell-wether after Meta stake buzz LVMH |
| 25 Jul | ECB meeting & press conference | Any hint of a September cut? |
| 31 Jul | UniCredit, Santander, Barclays reports | Bank NII compression vs. loan growth |
| 1 Aug | U.S. tariff implementation deadline | Final scope for EU exports |
Bottom Line
Europe’s rally is being powered by banks, defence names, and hopes that earnings downgrades have finally found a floor. Yet with tariff brinkmanship unresolved and second-quarter results days away, the STOXX 600’s push toward fresh records still hinges on **guidance holding up—**and on central-bank calm in Frankfurt and London.
