European stocks were rising on Friday, and lining up for the 10th straight winning session as investors have cheered solid corporate earnings and tried to keep concerns over the delta variant of coronavirus in check.

Banks, insurers and apparel makers were leading on the upside with the Stoxx Europe 600 index

up nearly 0.2% to 475.65, while industrials and energy companies slipped. The German DAX
the French CAC 40 index

and the FTSE 100 index

rose 0.3% each.

Data showed eurozone exports dropped in June for the sixth consecutive month, a sign that international goods trading remains weak even as many COVID-19 restrictions have been eased.

Headwinds are building for stocks in Europe, but it’s not quite time to turn negative yet, said a team of strategists at Bank of America on Friday, led by Sebastian Raedler. They have a neutral rating on the Stoxx Europe 600, seeing it trading close to 460 until early in the fouth quarter.

“Softening growth and rising real bond yields are set to weigh on EU equities. Yet it is too early to turn negative, given that our macro view implies a market pullback only in Q4, while reopening and EPS [earnings per share] upgrades imply overshoot risks near-term,” said Raedler and the team in a note to clients that published Friday.

The yield on the 10 -year German bund

is currently trading around negative 0.45%, not far off where it started the year.

The team advises staying overweight or bullish on financials, marketweight or neutral on cyclicals/defensives. “We raise the defensive food & beverages sector from underweight to marketweight, as the recent underperformance leaves it already priced for most of the bond yield upside we expect,” the team said.

They warn that the global macroeconomic cycle has peaked and investors should brace for downside to come in the euro area and for global purchasing managers index (PMI) surveys. And they expect slowing growth momentum in the U.S. and modest upside for China.

Among the gainers on Friday, shares of Adidas

rose 2.5% after the German sportswear maker said Thursday that it will sell its Reebok business to Authentic Brands Group for up to 2.1 billion euros ($2.47 billion) and distribute the majority of the cash proceeds to shareholders.

On the downside, shares of Ipsen

 tumbled 11% after the French pharmaceutical group said “following very recent discussions” with the U.S. Food and Drug Administration, it was withdrawing its New Drug Application for palovarotene. The drug is used to treat an extremely rare and severely disabling genetic disease, fibrodysplasia ossificans progressive.

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