Midweek Briefing, July 13

European Markets Hover, Waiting for Clarity

European equities tread water on Monday as investors awaited crucial catalysts—namely U.S. inflation data, a looming U.S.–Russia summit, and that sizable U.S.–China tariff expiration due August 12. The STOXX Europe 600 index barely budged (up 0.01%), while defense firms like Rheinmetall, Renk, and Hensoldt slipped on concerns over uneasy peace negotiations possibly undermining defense demand. Meanwhile, Ørsted’s stock dived 28% following its $9.4 billion rights issue tied to U.S. offshore wind setbacks. Reuters🔗

By midweek, markets found firmer footing. Globally, equities soared—record highs abounded—as U.S. inflation softened into a “Goldilocks” zone, boosting hopes of a Fed rate cut in September (now priced at 94%, up sharply from 57% a month ago). Cryptocurrencies and commodity markets also surged on the optimism wave. Reuters🔗

Tariff Truce Extended, but Geopolitics Stir the Pot

The U.S. and China extended their tariff truce for another 90 days, staving off disruptive triple-digit levies—at least for now. Reuters🔗

However, European eyes are ultimately looking toward Friday’s Alaska summit between Trump and Putin, which has sparked fears of coercive Ukraine diplomacy. European leaders are vocalizing their disapproval—urging U.S. leaders not to tolerate any territorial concessions or peace terms at Ukraine’s expense.

Nordic Spotlight: Nordic Semiconductor Delivers

It’s earnings day for Trondheim’s pride: Nordic Semiconductor unveiled Q2 financials with gusto. Revenue surged 28% year-on-year to $164 million, gross margin hit 50.7% (up from 42%), and EBITDA swung from –$7.2m in Q2 2024 to a positive $20.8m. Key parts of the business: Consumer accounted for 61% of sales, Industrial and Healthcare jumped 60% to $59 million. Management’s eyes are locked on keeping gross margins above 50% going into Q3 (guidance: $165–185 million in revenue). Investing.com🔗

Nordic also continues its transformation from pure hardware to full-stack IoT solutions—thanks to recent acquisitions like Neuton (AI at the edge) and Memfault (device cloud tools). Investing.com🔗

For transparency’s sake, a Q&A webcast with management is scheduled for August 13, immediately following today’s release. Inderes🔗

Macro Outlook: Is Europe Faltering—or Just Shifting Gears?

In the short term, Europe’s growth appears to be slowing—Eurostat data shows only modest 0.4% Q2 GDP growth—down from 2.4% in Q1. German factory orders have dropped for a second month, echoing cautious business sentiment. Schwab Brokerage🔗

Yet, it's not all doom and gloom: unemployment remains at a 25-year low, inflation is stabilizing, and a stronger euro is helping purchasing power and import prices. Schwab Brokerage🔗

The Nordic Angle in Focus

Nordic Semiconductor’s strong Q2 shows Nordic tech can still shine—even in choppy conditions. But they'll need to sustain margins at ~50% as they've planned.

Ørsted’s struggle signals caution for green energy in U.S. markets, potentially dampening investor enthusiasm for clean energy plays—especially those wooing U.S. stakeholders.

Meanwhile, tariff and geopolitical tensions remain a recurring theme, forcing Nordic investors and policymakers to scan both Washington and Brussels for policy shifts that could ripple across trade and capital flows.

What Does the Rest of the Week Hold?

In Summary:
European markets hover in tense anticipation. Some hopeful, some jittery. Global rate cut optimism meets geopolitical headwinds, while Nordic tech carves out a beacon with solid numbers. It's a week where earnings and central bank data may just override any political theatrics. If you're watching Oslo or Helsinki, the performance of Nordic Semiconductor and the reaction to macro wobble will be your barometers of calm, or alarm.