European stocks will likely end the fourth-quarter flat to negative as the"status quo" between the central bank stimulus support and a weak growth outlookbegins to slip, Standard & Poor's Capital IQ analysts write in a fourth-quarteroutlook.
"Given that the previous quarter witnessed a significant re-rating ofequities on the impulse of central bank puts, our belief is that 'after theliquidity must come growth' and we would need to see greater conviction inearnings estimates for further price appreciation," they add.
Third-quarter earnings season, due to start in the coming fortnight, is setto be "uncomfortable", the analysts write, citing weaker factory new orders datain the region and rising inventory levels -- both good indicators of forwarddemand.
S&P Capital IQ's expectations for profits next year are more positive,although both their 2012 and 2013 estimates for earnings per share growth lagconsensus, at minus 5 percent and plus 5 percent, respectively, againstconsensus of minus 2.7 percent and plus 12.8 percent, they write.
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Keywords: MARKETS EUROPE STOCKSNEWS