ABN AMRO : German economy smartly ahead

Having shot up in the first week of May, prices in the global equity markets stabilised in the week just past. The economic picture remained encouraging, particularly in Europe as Germany reported a strong upturn in its economy in the first quarter.

The week ahead should be pretty calm in terms of relevant economic news, as the results season is drawing to a close and not much is expected on the macroeconomic front. Ben SteinebachHead of Investment Strategy

The upbeat mood in Europe got an extra fillip from Emmanuel Macron's election as France's next president. An advocate of French economic reforms - long overdue in view of a number of rigidities - Macron is unashamedly pro-European and may well help breathe new life into the Paris-Berlin relationship.

The good news about Europe was confirmed by ECB president Mario Draghi on a visit to the Netherlands' lower house in The Hague. Draghi sang the praises of the Dutch economy but rejected Dutch MPs' criticism of his policies, pointing out that these remain necessary for the European economy at large.

Meanwhile, Germany's first-quarter growth was 0.6% up on the year-earlier quarter, making it one of the strongest growth percentages in the past few years. The country's industrial orders and production also continued to do well, a state of affairs seen in many other countries of the European continent. Overall, then, production is beginning to move in tandem with confidence indicators, which had been robust for quite some time. This effect is more marked in Europe than in the United States, which would appear to face slight recent falls in confidence indicators. That said, US employment was sharply up in April, at 211,000 new jobs.

Onward and upward for the AEX

The Amsterdam stock market gauge took it a little easier this past week, although the trend was up still. The earnings season is chugging along, but nearing its end. Reported earnings have generally beaten expectations.

It's been a reasonable week for the AEX index, which locked in the bulk of its gain at the start and is now at around the 535 mark. Its biggest winner was Shell (+3.6%), followed by Unibail-Rodamco (+3.1%), Unilever (+2.4%), SBM Offshore (+2.4%) and KPN (+1.7%). The losers were led by Aegon (-7.8%), followed by Boskalis (-6.8%), Akzo (-5.3%), Gemalto (-4.3%) and ArcelorMittal (-4.3%).

The market responded poorly to the releases by Aegon, Boskalis and ArcelorMittal. This was a tad strange in the case of ArcelorMittal, as its results were much better than had been expected. Improved margins on steel had the biggest impact, but all divisions contributed to its good results. The company predicted a second quarter in line with the first three months. Aegon's results also came in a little ahead of forecasts, but were bogged down by the ongoing concerns about the capital ratio commanded by the insurer's Dutch activities. Boskalis's markets continue to be challenging, as shown by its earnings update this time failing to surprise on the upside (as it usually does). Profit margins are squeezed in all its divisions and 2017 looks likely to turn into another tough year. PostNL also posted disappointing results at the start of the week. Except for International, all its divisions dipped below expectations while postal volumes contracted more sharply than had been predicted.

ING comfortably met the market's high expectations, with its retail and growth market activities doing particularly well. On balance, Ahold-Delhaize's numbers were also better, even if its sales disappointed. The retailer repeated its outlook for full 2017.

Among the Dutch market's smaller players, Beter Bed released a trading update that revealed a better-than-expected 7% upturn in sales. Basic-Fit also surprised on the upside as more people signed on with the chain of fitness centres.

Akzo Nobel rejected PPG's third bid, seeing greater value in a stand-alone proposition than the EUR 96.75 per-share offer. This time, Akzo Nobel did come to the table to talk to PPG, which may now be limbering up for a hostile takeover bid. Activist shareholders may seek legal recourse to get Akzo's chairman ousted. Rumour later in the week suggested that, for the first time, PPG is considering dropping its suit. To be continued …

In the international arena, Liberty Global released disappointing numbers and slashed its outlook for the full year. Figures for Disney also failed to make the grade, while ESPN sports pay TV again lost subscribers. Priceline, which owns booking.com, may have returned higher-than-expected profits but its forward-looking statement on the next quarter dipped below market expectations. And US company Snap, best known for Snapchat, reported very disappointing figures indeed: losses, plus lower daily app user numbers than it had held out for. Its shares took a hammering of over 20% on the news. Retailer Macy's also took a massive hit (-17%) after revealing results that fell short of expectations. Robust releases came in for Petrobras, Credit Agricole and Allianz among others.

News-lite macroeconomic week

The week ahead should be pretty calm in terms of relevant economic news, as the results season is drawing to a close and not much is expected on the macroeconomic front.

We're nearing the end of the earnings season, with retailer Wal-Mart as usual doing the unofficial honours on Thursday by bringing up the rear in the United States. Other companies with figures slated for release include RWE, Home Depot, Vodafone, EasyJet, Cisco Systems, Target, Tencent, Salesforce.com and Deere.

Macroeconomic news should be thin on the ground, with the calendar for the coming week displaying a dearth of key confidence indicators. A possible exception is the ZEW index, capturing investors' willingness to invest in the German and European economies in May. In addition, April inflation figures are due out for the United Kingdom, Italy, Germany and the European Union at large. Taking a leaf from Germany's book, various other EU countries will publish fresh data about economic growth in the first quarter, as will China and Japan. Meanwhile, China is about to release the usual series of figures for industrial production, capital spending and retailing in March. The Netherlands and the United Kingdom will also post new figures for retail sales; Japan for broader consumer spending. In the United States, where things are very, very quiet on the macroeconomic news front, we'll be looking out for new figures on April housing starts. March numbers fell by near on 7% compared with February.