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Supply Chain Chaos, Surging Costs Set to Plague Europe's Profits

(Bloomberg) Cost pressures, supply-chain chaos and a reopening letdown are set to plague Europe’s third-quarter earnings season, setting investors up for more disappointment than elation. While strong numbers from behemoths like LVMH and SAP SE reassured European stock investors last week, further good news may be needed to keep the rally alive. Rising inflation and a stalling global recovery pose a challenge to further market gains. “We expect fewer positive earnings surprises, more cautious corporate guidance and less earnings upgrades by analysts,” said Robert Greil, chief strategist at German private bank Merck Finck. Here’s what investors are going to be watching as companies roll out their results: Logistical Nightmares Pandemic-related chaos, post-Brexit customs checks and a shortage of truck drivers have wreaked havoc on supply chains. Clothing companies have been sounding the alarm ahead of the all-important holiday season, with online retailer Asos Plc warning that ....

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