European Earnings Are Pricing in Tariff Risks, Says BlackRock’s Jewell

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European Earnings Are Pricing in Tariff Risks, Says BlackRock’s Jewell.

watchlist :: 2025-07-21 :: source - bloomberg

By Sagarika Jaisinghani

European Earnings Are Pricing in Tariff Risks, Says BlackRock’s Jewell. Bloomberg

(Bloomberg) -- The outlook for European earnings is appropriately reflecting tariff risks, according to BlackRock Inc.’s Helen Jewell, who sees the rally extending in the absence of a trade shock.

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“Earnings numbers have already come down; that’s not a complacent market,” Jewell, chief investment officer of fundamental equities EMEA at the asset manager, said in an interview. “The gains have further to go as long as the European exporters pull their weight.”

Jewell’s view is in stark contrast to some market strategists, such as those at Goldman Sachs Group Inc., who warned that stocks are looking too sanguine given the lingering trade uncertainty ahead of the US tariff deadline on Aug. 1.

The Stoxx Europe 600 Index has surged 16% since hitting a low on April 9, just before US President Donald Trump paused some of the harshest levies in a century. Still, a Citigroup Inc. index shows analysts have consistently downgraded earnings estimates since mid-March, while the rally has slowed in the past month as investors assessed the impact of the trade war on consumer demand.

Analysts expect MSCI Europe companies to post a 4.8% drop in second-quarter earnings, the biggest year-over-year decline since early 2024, according to data compiled by Bloomberg Intelligence.

“If a company gets something a little bit wrong, there isn’t much room for maneuver,” Jewell said. “Is that a complacent market? No. Is it a market that perhaps is more fragile? Yes.”

With trade deals yet to be finalized, Jewell warned against being overly exposed to either US or European stocks. Instead, she recommended focusing on themes such as artificial intelligence and sustainable energy.