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Following the close of quarterly reporting season in Europeearnings forecasts for the STOXX 600 have sufferedtheir worst monthly cuts in nearly 5 years with certain UKlarge-caps playing spoilsport.
** Mean EPS for the STOXX 600 is down 2.4% percent over thepast month. http://link.reuters.com/waq37v
** Looking past the headline reveals that a handful of largeUK corporations are having a significant impact. UK EPSforecasts came off 3.4%, the largest among developed markets.
** According to Deutsche Bank, Royal Dutch Shell, Vodafone and BP are the top-3 contributors tooverall cuts in net income forecasts.
** Vodafone has had its mean forward EPS forecastcut by a quarter over the past month, according to StarMine, thebiggest drag on the telecoms sector which has fared the worst onEPS cuts across Europe.
** The STOXX index has seen 36 consecutive months of forwardEPS being cut.
** European shares have risen through the cuts supported inpart by fund inflows. Deutsche Bank says WesternEuropean-focused funds are the biggest beneficiary of moneyleaving EM.
** Any risk-off, whether due to Ukraine or a U.S. pullbackor China, is likely to hit stocks which have rallied despite aweakening earnings outlook the hardest. (Stocks Buzz is a pilot project. Please send any feedback orsuggestions to vikram.subhedar@thomsonreuters.com) (RM: vikram.subhedar.thomsonreuters.com@reuters.net)
