European equities had a rough week, with an energy-shock narrative increasingly dominating the macro discussion.
Early in the week, some research argued for selective European exposure — industrials, banks, utilities, and the AI value chain — alongside a constructive technical read on names like Commerzbank, Aurubis, and Siemens after its €6bn buyback. A rebound on Wednesday, helped by strong earnings from Merck, E.ON, Deutsche Telekom and Allianz, briefly supported the bull case, with one strand of analysis still flagging around 10% earnings growth for the Stoxx 600 and valuations below US peers.
But sentiment shifted decisively in the second half. Multiple analysts turned more cautious, citing the Iran conflict, surging energy costs, hotter US inflation, and weakening euro-area data — April PMIs at 48.6, German Ifo at a post-2009 low. France, Italy and Portugal were flagged as especially exposed. One scenario warned a move to $120–130 Brent could tip Europe into a technical recession, pressuring the Euro Stoxx 50 and DAX, which slipped back toward 24,200.
Renewables remained a rare structural bright spot.