The bulk of U.S. and European first-quarter earnings come in this week. The pace of analyst upgrades versus downgrades has slowed recently for most regions after peaking in March. However, first-quarter earnings and sales growth in the U.S. so far have been solid, on average, supported by tax cuts and healthy consumer spending. We see more of this trend ahead. In the eurozone, we are focused on how the earnings of globally exposed firms compare with those of domestic-focused ones amid the region’s disappointing economic data and a stronger euro versus the U.S. dollar. In both regions, we expect the results of energy and materials firms to benefit from higher commodity prices.
Richard Turnill is global chief investment strategist at BlackRock. 