Key Takeaways
- German Factory Orders surged 3.1% in June, far exceeding the 0.5% consensus estimate and signaling a potential rebound in Europe’s largest economy.
- Deutsche Telekom (DTEGY) increased its 2026 share buyback program by $3.5 billion and raised its free cash flow guidance to €20.0 billion following strong results from T-Mobile US.
- Henkel (HENKY) and Merck KGaA (MRK) both lifted their full-year 2026 outlooks after reporting robust organic sales growth and easing currency headwinds.
- SanDisk (SNDK) reported soaring revenue driven by AI data storage demand, though shares saw modest profit-taking after the company issued a "measured" outlook for the coming quarter.
- Sweden’s inflation continued its downward trend in July, with the CPIF (fixed interest rate) holding at 0.7%, well below the Riksbank’s 2% target.
European Equities Gain on Strong Industrial Data
European stock futures pointed to a positive opening on Thursday, with EURO STOXX 50 futures advancing 0.23% and the DAX adding 0.16%. The sentiment was bolstered by a significant beat in German Factory Orders, which rose 3.1% month-over-month in June. This recovery was primarily driven by large-scale orders, as the figure excluding these contracts showed a slight decline of 0.5%.
Corporate Giants Raise Guidance
A wave of positive earnings reports from major German corporations further supported the market. Deutsche Telekom (DTEGY) announced it would increase its total 2026 share buyback authorization to €5 billion ($5.77 billion). The telecom giant also raised its guidance for adjusted EBITDA AL to €47.5 billion, citing continued momentum at its U.S. subsidiary, T-Mobile US (TMUS).
Henkel (HENKY) raised its fiscal 2026 organic sales growth target to a range of 1.5% to 3.5%, up from its previous forecast of 1% to 3%. The consumer goods maker reported that H1 organic sales grew by 3.2%, beating analyst expectations of 2.5%. Similarly, Merck KGaA (MRK) lifted its adjusted EBITDA forecast to between €5.9 billion and €6.3 billion, driven by high demand for semiconductor materials and drug manufacturing supplies.
Defense and Tech Momentum
Rheinmetall (RHMG) reported a massive 44% year-over-year increase in its order backlog, which now stands at €80.5 billion. The defense contractor maintained its full-year operating margin guidance of approximately 19% while reporting H1 operating profits of €786 million, surpassing the €697.2 million estimate.
In the technology sector, SanDisk (SNDK) saw revenue for its fiscal fourth quarter jump 51% sequentially to $8.97 billion. While the company's net income surged to $6.90 billion on the back of the AI infrastructure buildout, management provided a first-quarter revenue forecast of $10.3 billion to $10.8 billion, which was largely in line with Wall Street expectations.
Disinflation Trends in Sweden
Economic data from Sweden showed that price pressures are easing faster than anticipated. The July CPI fell 0.3% month-over-month, bringing the annual inflation rate to 0.2%. The CPIF, which is the Riksbank's preferred measure, remained at 0.7% year-over-year, reinforcing expectations for potential monetary easing as the figure remains significantly below the central bank's stability target.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.