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Investing.com - Deutsche Bank released a new research note on Thursday indicating that European corporate earnings are poised to outperform current market expectations for the third quarter of 2025.
The German banking giant reported that while consensus estimates project STOXX Q3 earnings to have declined by 2% year-over-year, its analysis suggests low single-digit growth is more likely. Deutsche Bank cited an improving European macro environment in Q3, characterized by rising Purchasing Managers’ Indices (PMIs) and reduced concerns about tariffs.
The bank noted that the United States continues to exceed growth expectations, though it cautioned that a weaker U.S. dollar has dampened some positive earnings effects for European companies. Deutsche Bank specifically highlighted the banking sector as a potential source of upside surprises in the upcoming earnings season.
Despite conservative expectations for the current quarter, Deutsche Bank observed that market consensus anticipates an acceleration in earnings growth for subsequent quarters, with full-year revisions having stabilized. The research note mentioned that German fiscal stimulus initiatives are expected to begin soon, potentially lifting market expectations further.
Looking ahead, Deutsche Bank set its 2026 earnings growth forecast for European equities at 10-12%, reflecting a positive medium-term outlook despite near-term caution in market consensus estimates.
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