US profits to outshine Europe this season?

This earnings season, strategists at JPMorgan Chase expect US firms to significantly outpace their European counterparts in terms of profit growth.

European stocks had one of the worst years versus Wall Street in 2024.

European stocks vs Wall Street

According to JPMorgan analyst Mislav Matejka, the earnings outlook has been lowered significantly for firms in the S&P 500.

Analysts have cut their predictions for the benchmark s&0 500 "meaningfully" before the season began. That comes even as the US economy has shown strong growth.

At the same time, Matejka warned that European companies may find it more challenging to achieve the "more punchy" expectations level.

The strategist said, "This puts Europe more at risk, especially when comparing the pace of activity momentum."

That's more bad news for European stocks, which underperformed US stocks by 17 percentage points last year.

The Stoxx 600 index marked their second-worst relative, showing since the benchmark was created in 1998.

The disparity was caused by the rapid expansion of the US economy and the increasing demand for America's big tech stocks.

Investors are still trying to predict the impact of Donald Trump's America-first policies and plans for massive global tariffs.

Stock prices this year have been volatile, with Wall Street bulls currently in the hot seat. Both Europe and the US have seen several high-profile misses and beats in the early findings.

Big US Banks including JPMorgan, Goldman Sachs, Citi and Wells Fargo had their shares rise after reporting better-than-expected results, while pharmaceutical Eli Lilly saw its share price fall following a disappointing revenue estimate.

Many European companies, including BP and Taylor Wimpey, have been disappointed. Meanwhile, Richemont, a behemoth in the Swiss luxury goods industry, set a new quarterly sales record.

(With the inputs from the agencies)