European shares trade higher on Tuesday, following a long weekend for traders and building on the boost to market sentiment carried over from the Asian session. Today’s risk appetite comes amid investors welcoming the reassuring release of China’s trade balance release, which topped estimates, while traders’ appetite was further boosted by strong signs of an easing rate of infection in the region. Furthermore, investors were also pleased to see lower trends in other deeply impacted regions such as Spain, Italy and New York and even a potential date for the end of France’s lockdown, which was announced by President Macron yesterday.
Photo by Erol Ahmed.
However, investors now enter what is expected to be a very uncertain earnings season, starting with big financial names like Goldman Sachs, Blackrock, Wells Fargo and JP Morgan Chase publishing their Q1 results today. Even if markets have already priced in significant impact to companies, uncertainty remains over the steps companies have taken to mitigate the negative effects of coronavirus on their results. Big diversified companies, generally exposed to more different risks than penny stocks, are likely to suffer a bigger hit with several dividend cuts expected across nearly all sectors.
Information technology, healthcare and staple consumer are the sectors providing the top moves on the Euro Stoxx-50 Index today while the CAC-40 is trading sideways with investors not sufficiently reassured by the potential date for the end of the lockdown looming in May. The market is currently trading above 4,500pts and is close to its major resistance found just below 4,575pts. A clearing of this level could extend the rally towards 4,680pts-4,810pts and 4,870pts by extension. However, a fall below its short-term support at 4,475pts would likely send the market back to its bearish trendline towards 4,330pts.
