Key Takeaways
- Citigroup (C) significantly raised its price targets for defense giants Lockheed Martin (LMT) to $691 and Northrop Grumman (NOC) to $667, reflecting a bullish outlook on the aerospace and defense sectors.
- Italy's electricity demand reached a historic peak in July 2026 as a severe heatwave forced temperatures above 40°C, straining the national grid and driving power prices to multi-year highs.
- Nomura adjusted its interest rate forecast for Norway, now anticipating the next hike in November rather than September, following softer-than-expected underlying inflation data.
- Solar generation provided a critical buffer for the European energy grid, supplying roughly 25% of EU electricity during the peak of the summer heatwaves.
Defense Sector: Citigroup Raises Targets for LMT and NOC
In a major update to its aerospace and defense coverage, Citigroup (C) has increased its price targets for two of the industry's largest players. The firm raised its target for Lockheed Martin (LMT) to $691 from $641, while simultaneously boosting its target for Northrop Grumman (NOC) to $667 from $617.
These adjustments come as defense contractors benefit from a robust global demand environment and record backlogs. Lockheed Martin (LMT) recently raised its 2026 sales guidance to a range of $79.75 billion to $81.75 billion, driven by accelerated production of munitions and the F-35 program. Similarly, Northrop Grumman (NOC) continues to see strong momentum from its B-21 Raider program and a record $105 billion backlog.
Energy: Record Demand and Heat Stress in Italy
Italy experienced a record-breaking surge in electricity demand this July as a "red alert" heatwave gripped major cities. Temperatures exceeding 46°C in regions like Sicily drove cooling needs to unprecedented levels, causing daily power demand to spike by as much as 22%.
The extreme heat has also impacted supply, with thermal and nuclear generation efficiency dropping across Europe. While solar output rose by 17% during the heatwave to help stabilize the grid during daylight hours, Italian day-ahead electricity prices still climbed to their highest levels in three and a half years due to supply scarcity after sundown.
Monetary Policy: Nomura Shifts Norway Rate Hike Outlook
Nomura economists have pushed back their expectations for the next rate hike from the Norges Bank, Norway's central bank. Previously forecasting a move in September, the firm now sees the next 25-basis-point increase occurring in November.
The shift follows data showing that Norway's underlying inflation slowed to 2.7% in July, coming in below consensus expectations for the second consecutive month. While the Norges Bank maintains a restrictive stance to bring inflation toward its 2% target, the recent cooling of price pressures has provided policymakers with more room to delay further tightening.
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.