According to Zhitong Finance APP, as European stocks fall from their historical highs, a series of industry-leading companies such as ASML Holding will release their earnings reports this week, which is crucial for revitalizing the market's upward trend. These companies account for about 21% of the Market Cap of the Stoxx Europe 600 Index, with chip equipment manufacturer ASML being one of the most notable companies, as its prospects will be closely watched after the Chinese startup Deepseek shocked the technology industry with its cost-effective AI model.

The luxury goods giant LVMH, the German software company SAP SE, the energy company Shell, and the Banks Deutsche Bank are also on the earnings report list.

As the European benchmark Index retreats from historic highs, investors will look for signs of stable economic growth and strong profit margins. The weakening euro will boost exporters, making Exchange Rates a focal point. On the other hand, a strong dollar poses a threat to the income of importers.

Data from Barclays shows that overall, the expectations threshold is low, with Analysts predicting only a 2% year-on-year growth in earnings for the fourth quarter. Stephane Deo, senior portfolio manager at Eleva Capital, stated that despite the Index rising by 4.5% in January, there is still greater room for growth if favorable news comes.

"When a stock presents disappointing results in the USA, it takes a hit because its current pricing is usually set to be flawless. In Europe, the situation is exactly the opposite. The stock price has included too much bad news, and it doesn't need many positive surprises to trigger a surge."

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Given the market's optimistic view that, compared to the levels of concern, USA President Donald Trump may take a milder stance on global trade issues, the Stoxx 600 Index reached a record high last week. However, due to concerns about overvaluation of stocks in other regions triggered by rumors surrounding DeepSeek, the stock market experienced turbulence on Monday.

In terms of earnings, early reports from Europe showed mixed results. Burberry Group's revenue exceeded expectations, with the stock price rising by 10%, while the impressive performance reported by Swiss luxury goods giant Richemont SA also led to a historic high in stock prices. The strong performances of these companies will be a good sign for the entire industry and will effectively ease concerns about the sluggish Chinese market, which is a key market for the luxury goods industry.

Olivier David, the fund manager at Vega IS, stated, "If LVMH can confirm this trend, it would be a very good signal, especially for France and the luxury goods sector. From the feedback we have received, European companies may also benefit from American companies' inventory replenishment actions before a potential trade war."

On the other hand, LM Ericsson Telephone's (ERIC.US) profits disclosed last Friday were below expectations, leading to a 13% drop in stock price, while BP PLC (BP.US) received a warning due to generally weak business prospects, resulting in a decline in stock price. Retailers had a lackluster start to the quarter, with disappointing reports from Primark owner Associated British Foods and Puma.

Meanwhile, the unexpected rebound in business activity in the Eurozone this month has also provided optimistic reasons for company executives. Analysts have become more optimistic, with an Index from Citigroup indicating that the number of companies raising profit expectations has exceeded the number of companies lowering them, reaching the highest levels since June.

Goldman Sachs strategists are optimistic that economic growth has stopped declining sharply. Peytavin stated, "We expect the earnings report season to be neutral or slightly positive. Economic momentum is not deteriorating further, the euro is slightly depreciating, and rising yields may benefit the banks."