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1. The outlook for European corporate health has improved, after the trade deal with the U.S.

European companies are expected to report growth of 1.8% in second-quarter earnings, on average, according to LSEG I/B/E/S data, a large improvement from the 0.3% fall analysts had expected a week ago.

2. Domestic stocks stay in favour.

The short-lived boost to European stocks from the EU-US trade deal underlines how tough it will be to shake the current preference for domestically-focused equities.

“Investors may briefly want to buy stocks on the lowered trade/political risk premia, but we think this announcement of a ‘deal’ at 15% tariffs will drive even further divergence between goods/exporters and domestic/service providers,” say UBS strategists including Gerry Fowler. They favor European banks, electrification and construction stocks, telecoms and utilities.

3. Pharmaceutical companies, which are heavily sensitive to US tariffs, look cheap.

A flat 15% tariff rate on EU pharmaceutical products, with 0% for certain generics, “should send a positive signal to investors that have been on the sideline for the most tariff-exposed names,” say Barclays analysts.

4. New Novo Nordisk CEO comes with a lower growth guidance of 8-14% (was 13-21%).

“Growth is being affected by competition in the US and persistent use of compounded GLP-1s …..without aggressive intervention by federal and state regulators and law enforcement, patients will continue to be exposed to the significant risks posed by knockoff ‘semaglutide’ drugs made with illicit or inauthentic foreign active pharmaceutical ingredients".

5. “The market for self-driving vehicles will hit $200 billion by 2030.”

“An outsized EV user base and tech deflation have given China an early edge, but dominance of AI computing power and data are advantages that Silicon Valley firms and Germany’s Big Three can use to boost their positions”

Source: MS

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