Financial results in the coming week point to problems for the luxury sector and some banking problems

Richemont’s resilient jewellery business should act as a buffer, but there’s no end in sight for Burberry as the company undergoes a strategy shift. Hundreds of jobs could be at risk in the process.

With central banks across Europe in easing mode, attention will be focused on the trajectory of net interest income (NII) for Nordic lenders, which will boost bank earnings next week. While Sweden’s SEB and Swedbank likely saw net interest income fall in the second quarter, Nordea Bank Abp and Danske Bank were able to counteract the impact of lower interest rates with deposit protection.

Dutch semiconductor equipment maker ASML — whose shares topped €1,000 a share for the first time this week — should be on track to meet sales targets after a disappointing first quarter, while Swiss pharmaceutical giant Novartis’ earnings report will be scrutinized for additional clues about the growth potential of some of its key drugs.

Nordea’s net interest income growth is expected to slow Monday to 5.2% in the second quarter, from 10.7% in the first, according to consensus estimates. While the pace is likely to slow to around 3% for the full year, the bank’s hedging strategy should help offset the blow from lower interest rates, according to Bloomberg Intelligence (BI) analysts Mar’Yana Vartsaba and Philip Richards.

The recent indictment against Nordea over historical anti-money laundering controls is sure to be a topic of conversation for analysts as the repercussions of the scandal that has rocked Nordic banks since 2018 continue to linger.

Consensus Tuesday was for jeweller Richemont’s Jewellery Maisons to post a rise in revenue in constant currencies in the first quarter of its fiscal year, but that effect could be overshadowed by a decline in sales of specialty watches.

The luxury jewellery sector, which has grown to almost 70% of sales in the past five years, will become even more important in the current fiscal year following management changes at Cartier and Van Cleef & Arpels, according to BI’s Deborah Aitken.

She added that, amid intense succession planning, smaller units facing ups and downs in margins may also be ready for change.

ASML’s second-quarter sales are expected to show a sequential improvement on Wednesday after falling off the balance in the first three months of the year, according to consensus. Strong demand for lithography tools likely put the semiconductor equipment maker on course to hit consensus operating profit of 1.7 billion euros and orders exceeding 4 billion euros, according to BI’s Masahiro Wakasugi.

Citi analysts believe that TSMC’s expected order for next-generation 2-nanometer technology will be a key driver in the second half of the year. They predict that AI and government investment will help boost the company’s revenue by 2030, which is expected to be between €44 billion and €60 billion.

Novartis is unlikely to raise its forecasts on Thursday when it reports second-quarter results, as it did last year. On the same day, phone company Nokia will report its second-quarter and half-year financial results.

While the 2024 targets remain achievable, the growth momentum of key drugs such as Entresto, Consetyx, Kesimpta, Kisqali and Pluvicto is still under scrutiny, according to BI’s John Murphy and Sam Fazeli. The outlook for MorphoSys’s lead product, pelabresib, will now be reviewed as a €2.7 billion acquisition is already underway, they said.

Burberry’s same-store retail sales on Friday were likely to have fallen 16% in the fiscal first quarter, according to consensus estimates, extending an 18% jump in the same period last year. Weak demand in China and the U.S. will not ease the burden in the first half of the year, even as the British fashion house changes course to broaden its appeal, BI’s Ms. Aitken said. More lower-priced items and a pick-up in tourism could help turn the company’s fortunes around in the second half.

Meanwhile, European central bankers will meet again on Thursday to discuss the regulator’s roadmap for cutting interest rates before the summer break in August.

The European Central Bank already implemented one of 10 planned interest rate cuts last month, lowering its main lending rate from 4.50% to 4.25%. But most of the cuts are likely to come next year.

The availability of funds for purchasing residential properties is expected to increase as interest rates fall, which could boost sales in the luxury goods sector.

• Bloomberg with additional reporting from Irish Examiner