European stock markets are trading with slight declines as they await the results from Alphabet and Tesla, which will serve as a gauge for the profitability of artificial intelligence. The Ibex 35 drops 0.12% on a day marked by the results from Santander, Iberdrola, and Enagás.
European markets are facing a slightly negative tone this Wednesday. The Eurostoxx 50 falls by 0.37% and the Ibex 35 remains contained with a drop of 0.12% at the start. American futures are flat on the S&P 500 and show slight declines on the Nasdaq 100, awaiting results from two tech giants.
The major reference of the day will come after Wall Street closes with the publication of results from Alphabet and Tesla, two of the so-called 'Magnificent Seven'. The market sees these results as one of the first major tests to determine whether the high expectations surrounding artificial intelligence are still justified.
Renta 4 Banco points out that the market needs to verify to what extent the enormous investments made in artificial intelligence are beginning to translate into revenue. The evolution of Alphabet's cloud computing business will be one of the main references to measure the degree of monetization of these investments.
The firm also focuses on the evolution of capital expenditure (capex). After several quarters of significant outlays, investors are looking for signs of greater financial discipline and a more visible return on those investments.
The importance of these results goes beyond both companies. In the coming days, results from Microsoft, Meta, Apple, and Amazon will also be released, while Nvidia will publish in August.
In the Spanish market, the day is also marked by an intense corporate agenda. Santander, Iberdrola, Naturgy, Enagás, Metrovacesa, and Global Dominion are presenting their half-year results.
Bankinter highlights that Santander has published figures in line with expectations, while Enagás and Iberdrola beat market forecasts. However, the entity believes that the real catalyst for the markets will come with Alphabet and Tesla.
The firm also reminds that expectations are particularly demanding. In the United States, a growth in earnings per share (EPS) close to 24% is expected for the second quarter, while in the tech sector, forecasts hover around 40%. In Europe, estimates point to an EPS growth of 15%.
Juan José Fernández-Figares, director of IICs at Link Gestión, believes that European stock markets will remain focused on both the intense battery of corporate results and the evolution of oil prices. The expert also highlights that it will be the opening of Wall Street that will likely set the definitive tone for the European session.
Another major protagonist continues to be oil. Renta 4 Banco explains that Brent extends its rise driven by concerns over maritime transit through both the Strait of Hormuz and the Red Sea. This is compounded by uncertainty regarding the evolution of the conflict between the United States and Iran, a scenario that keeps the market alert to any potential escalation.
The Link Gestión expert also emphasizes that the evolution of oil prices will continue to influence investor sentiment throughout the day, acting as the main indicator of the geopolitical situation. Meanwhile, gold and silver also maintain an upward trend as safe-haven assets, while major cryptocurrencies register declines.
On the macroeconomic front, the main reference this Wednesday comes from the United Kingdom with the publication of the consumer price index (CPI) for June. The data shows a moderation of overall inflation to 2.6%, in line with the slowdown observed in other developed economies due to lower energy costs.
For investors, the key to the day lies in the results from Alphabet and Tesla, which will determine whether the AI rally has solid foundations or if current valuations are too tight. The evolution of oil and macro data will continue to be factors to watch in the coming sessions.
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