A look at the day ahead in European and global markets from Ankur Banerjee A sales miss by luxury giant LVMH due to Chinese shoppers keeping a lid on spending and disappointing results from major U.S. tech firms Tesla and Alphabet will likely keep investors skittish ahead of a slew of European earnings.
A busy Wednesday sees European banks take the spotlight, with the focus on whether gains from higher interest rates have run out of steam and if recent political drama is weighing on sentiment. The euro zone's two largest lenders by market value, Spain's Santander and France's BNP Paribas, are due to report for the April to June period, alongside Germany's Deutsche Bank and Italy's UniCredit. Luxury stocks in Europe will likely take a beating after LVMH, owner of labels Louis Vuitton, Tiffany & Co and Hennessy, flagged a 14% decline in sales in Asia, excluding Japan, in the second quarter, after a 6% drop in first quarter.
A gauge of the top 10 European luxury stocks is already down 2.6% in July, set for a fifth straight month in the red after a profit warning from smaller label Burberry last week. The technology sub-index in Europe, which has been volatile in the past few weeks due to worries of rising trade tensions over chips, will likely be under pressure after EV maker Tesla reported its smallest profit margin in more than five years.
Beyond earnings, attention will also be on PMI data in Europe that will allow investors to gauge the health of the economy and ascertain wh.