Investors Are Worried About European Banks

  • Several analysts have raised concerns over earnings this quarter due to external risks such as low economic growth, uncertainty over U.S.-China trade deal, Brexit and a U-turn on major central bank policy towards more easing.
  • European banks are suffering from years of weak profits, massive fines, ultra-low monetary policy and uncertainty surrounding the U.K.’s exit from the European Union.
  • CNBC takes a look at the big European banks that are set to report over the next two weeks and what drives their strategy

Big European banks are set to report their first-quarter earnings starting next week and some investors fear that poor report cards could lead to further volatility in the stock markets.

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Several analysts have raised concerns over earnings this quarter due to external risks such as low economic growth, uncertainty over U.S.-China trade deal, Brexit and a U-turn on major central bank policy towards more easing.

Daniel Morris, senior investment strategist at BNP Paribas told CNBC Monday that results among European corporates in the fourth-quarter of 2018 was on the lower end.

“It was one of the lowest you had in a long time. We really didn’t notice because we were recovering from the end of December and you had the Fed and so on. Now, we have digested the Fed, I think we have priced in most of the (U.S.-China) trade deal so earnings are going to matter this time. And if we have such minimal beats over expectations and of course as we know expectations are very low for this quarter, I think markets are not going to be happy with that,” Morris told CNBC’s “Squawk Box Europe.”

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