China’s Export-Led Recovery Cuts Both Ways for European Stocks

China’s emergence as a tougher competitor and weaker customer is clouding the outlook for European stocks this earnings season.

Profit warnings from an array of sectors aren’t just a symptom of waning demand from Chinese consumers — they also point to increased competition from the nation’s companies, as it floods the world with its own goods.

“China is currently not a catalyst for European stocks — quite the opposite,” said Isabelle Mateos Y Lago, Chief Economist BNP Paribas. “Growth (in China) is pulled by exports and as long as this is the case, this isn’t good news for European ...