European stocks fall as White House will likely send tariff letter to the EU

This week, from Oslo, a report highlighted how sales in Norway are bucking the trend of declining sales across Europe.

It’s interesting to consider what has made this Scandinavian country a notable success for American electric vehicle manufacturers.

In corporate news today, the prestigious Italian fashion brand Cucinelli revealed a 10.7% increase in earnings for the first half of the year. This uptick comes with strong forecasts, as sales grew by double digits in both the US and Asian markets. They remain optimistic, estimating around 10% annual sales growth for this year and the next.

Meanwhile, in the UK, a new investment plan promises to allocate 163 million euros (about $190.5 million) to satellite operator Eutelsat, which is seen as a potential competitor to Starlink. The European government views this investment as a significant step toward enhancing local satellite capabilities and reducing reliance on American firms for communications and defense.

This fund will also allow France to inject 750 million euros later this year, helping the UK retain its stake, with a total recapitalization reaching 1.5 billion euros.

The British pound experienced a decline following unexpected shrinkage in the UK economy during May. At 8:47 am in London, it was down 0.2% against the US dollar, trading at 1.35 dollars, and similarly down 0.1% against the euro.

Some economists suggest that this lackluster growth could prompt the Bank of England to consider lowering interest rates in August. Capital Economics’ chief UK economist predicts an overall GDP growth of around 1% for this year, which has understandably dwindled due to a slowing global economy and persistent high domestic taxes impacting UK businesses.

European market sentiment has notably turned negative after experiencing several days of solid gains. Early on Friday, most sectors of the Stoxx 600 index, excluding oil, gas, and insurance, opened in the red, down by 0.46% at 8:10 am London time.

British oil giant BP announced on Friday potential losses of up to $1.5 billion due to lower oil and gas sales in the second quarter, alongside post-tax impacts across its operations.

In a transaction update provided ahead of full second-quarter results, the company estimated revenues from its gas and low carbon sectors would range between $100 million and $300 million for the April to June period. However, oil sales losses are expected to hit between $600 million and $800 million during the same timeframe.

Additionally, BP noted that second-quarter results could reflect after-tax adjustments from asset disruptions ranging from $5 billion to $1.5 billion across its entire segment.

On a more positive note, the petroleum products division has seen stronger refining margins, expected to generate between $300 million and $500 million, indicating that oil trading results may be favorable.

Interestingly, BP is also anticipating an uptick in upstream production compared to the previous three months.

The company continues to face challenges in realigning its strategies amid lower stock prices compared to its oil and gas peers, particularly in the US, where speculation about potential acquisition targets has been increasing.

The Stoxx 600 Index celebrated four consecutive days of gains. However, IG futures indicate a pessimistic opening for major stocks on Friday. A key development is US President Donald Trump’s announcement of a 35% tariff on imports from Canada starting August 1, which may provoke Ottawa’s retaliation.

This announcement is distinct from upcoming tariffs on sectors like steel, aluminum, automobiles, and potentially copper.

Investor interest is also heightened as they await a letter from Trump, expected to detail tariffs aimed at the European Union, set to be released “in the next few hours.”