Good morning. European earnings are in the spotlight again after Gucci warns profit will tumble, BOE officials are divided on rate-cut timing and some of the impetus behind gold’s recent rally can be traced to China. Here’s what people are talking about.
Luxury goods maker Prada is among a host of European companies due to report a day after Kering said that profit will plunge in the first half of the year as the crisis at Gucci, its biggest brand, deepens. Recurring operating income will drop between 40% and 45% in the first six months, Kering said. That’s after comparable sales at Gucci tumbled 18% in the first quarter on slack demand in China. Investors’ attention will now turn to results from others including Heineken, Volvo and Lloyds Banking Group. In other corporate news, Germany’s leading automakers from Volkswagen to BMW are attempting to mount a comeback in China after the rapid shift to electric vehicles eroded their share of the world’s biggest auto market. The question is: Can they adapt to a market now dominated by local champion BYD?
