Swedish defense contractor Saab AB reported a stellar second-quarter performance, posting a 41% increase in operating earnings to 2.79 billion Swedish crowns ($289 million), comfortably surpassing analyst expectations of 2.48 billion crowns. The company's sales grew 29.8% year-over-year, while order bookings skyrocketed 141%, fueled by a sustained defense boom across Europe following the conflict in Ukraine.
Saab, renowned for its Gripen fighter jets, submarines, and advanced missile systems, secured several landmark contracts during the quarter. Notably, the company inked a $4.8 billion agreement with Poland for submarines, alongside significant orders from NATO and Canada for surveillance aircraft. CEO Micael Johansson highlighted ongoing discussions regarding next-generation fighter jet partnerships, with Airbus expressing interest in collaboration.
Across the Atlantic, U.S. stock futures edged lower on Friday, with the E-mini S&P 500 and Nasdaq-100 futures slipping between 0.1% and 0.4%. Investors weighed mixed inflation signals and renewed trade tensions. A proposed 25% tariff on Brazilian imports has sparked concerns about increased costs for companies deeply integrated in global trade, while U.S. crude inventories and the Strategic Petroleum Reserve have fallen to multi-decade lows, raising the specter of elevated fuel prices.
In premarket trading, AST SpaceMobile shares tumbled 17% after announcing a convertible notes offering, while Nebius Group and Bloom Energy also declined on regulatory and supply concerns. The technology-heavy Nasdaq was poised to extend losses, dragged down by weakness in semiconductor and AI-related stocks.
The dollar remained little changed on Friday but was on track for a weekly loss, as subdued U.S. inflation data led traders to scale back expectations for near-term Federal Reserve rate hikes. The dollar index held steady at 100.69, heading for a 0.3% decline over the week. Meanwhile, the euro and British pound edged higher, supported by easing economic worries, while the Japanese yen hovered near 40-year lows despite potential intervention risks.
On the data front, the U.S. Producer Price Index for June fell 0.3% month-over-month, offering some relief on factory-gate costs, though core producer prices rose 0.2%, indicating persistent services inflation. The yield on 10-year Treasuries remained stable near 4.56%, reflecting ongoing borrowing cost pressures. Investors are now parsing whether easing inflation and elevated interest rates will benefit rate-sensitive sectors like real estate or favor industrials and exporters.
Market participants are closely watching the release of U.S. financial company earnings and global inflation data. Results from regional banks and insurance companies are due Friday, while decisions on interest rates in China and new producer price data from Europe are expected to further inform the outlook for international trade and inflation.
In ETF news, Global X ETFs ICAV reported unaudited Net Asset Values for several funds as of July 16. The Global X Video Games & Esports UCITS ETF posted a NAV of $12.0314 for the accumulation class and $11.7359 for the distribution class, while the Global X E-Commerce UCITS ETF stood at $13.9884. Other funds reporting include Telemedicine & Digital Health, CleanTech, Data Center REITS & Digital Infrastructure, Autonomous & Electric Vehicles, Cybersecurity, and Robotics & Artificial Intelligence.
