StockBeat – Europe's Markets Are Ending Strong Quarter Sharply Higher

© Reuters.

By Geoffrey Smith – Europe’s stock markets are closing the quarter on a surprisingly upbeat note, following Wall Street and Asia higher.

There’s no obvious catalyst for the move: U.S. and Chinese officials appear no nearer a trade deal than before, and President Donald Trump’s chief economic adviser Larry Kudlow said late Thursday it could take months rather than weeks to iron out the remaining wrinkles. The Financial Times reported Friday that Chinese officials, too, concede that an agreement could take more than just a few weeks.

Germany’s retail sales data earlier beat expectations, but its disappointed, as did numbers on French and in the fourth quarter.

Still, it’s been a solid first quarter for all the region’s major indexes. Italy’s has been the best performer with a gain of 15.5%, followed by the with 12.5% and the Amsterdam with 12.2%. The U.K. gain of only 7.9% looks better when adjusted for the pound’s 4.4% rise against the euro so far this year, which means that the real laggards are Spain’s , up only 7.8%, and Germany’s , up only 8.8.%.

Even so, only half of the big indexes are above where they were a year ago, which underlines how much ground was lost due to the trade war between China and the U.S. over the second half of 2018. The FTSE MIB 30, the star of 2019 to date, is still down 5.6% from a year ago, while the benchmark is up only 1.9% in the same period.

The Stoxx 600 is enjoying itself this morning though, up 0.80 points or 0.2% at 377.60 by 05.15 AM ET (09:15 GMT). It’s being helped by big gains at Swedish retail giant H & M Hennes & Mauritz (ST:), whose latest trading statement showed a big improvement in margins as it finally worked through shifting mountains of unsold inventory, and by French telecoms group Altice (AS:), which also promised an improvement in margins this year.

Germany’s Dax is up 0.4%, while the is up 0.5%

On the downside, travel company Tui (LON:) has fallen over 8% after warning that the grounding of its Boeing (NYSE:) 737 MAX airplanes will cost it $225 million this year. It now expects its basic operating profit to fall 17%, having earlier expected it to be flat vis-à-vis 2018.

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