Q2 season so far: "fine but not fabulous"

Q2 SEASON SO FAR: "FINE BUT NOT FABULOUS"

We're about one week into Q2 earnings season, and the next few days will be crucial for setting the tone across equity markets on both sides of the Atlantic.

Investors are awaiting results from Wall Street giants Alphabet GOOG and Tesla TSLA, as well as from European heavyweights SAP SAP, LVMH MC, and Roche RO, as tariffs uncertainty clouds the outlook.

But how has the season gone so far?

"Out of the gate, our impression is that it's been fine but not fabulous," writes RBC Capital Markets.

The bank notes that while the rate of EPS beats is higher than in Q1, market reaction to positive news has been muted.

Macro discussions and the overall outlook from financials - which have dominated early reports - point to a "solid consumer" in a resilient U.S. economy.

However, while the overall tone sounded cautiously optimistic, RBC said a comment from Fifth Third - that we're not in "a wild animal spirits risk-on sort of an environment" -was particularly insightful and representative.

Tariffs remains a dominant theme, forcing companies to adjust guidance, with more of this expected in the weeks ahead.

"So far, our concern that investors have been too quick to write off tariff impacts hasn’t been alleviated," RBC concluded.

Meanwhile in Europe, Q2 is proving to be a mixed bag, with misses punished more severely than usual, Goldman Sachs says.

This week, 135 S&P 500 SPX components and 189 STOXX 600 SXXP companies are reporting, per Deutsche Bank.

(Danilo Masoni)

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EARLIER ON LIVE MARKETS:

MINERS AND AIRLINES UPLIFT CLICK HERE

BEFORE THE BELL: TARIFFS, EARNINGS AND ECB CLICK HERE

COULD HAVE BEEN WORSE, IS ENOUGH FOR THE YEN CLICK HERE