[MARKET ANALYSIS] DAX 40 lags as Siemens guidance disappoints investors; SoftBank's Q1 net beat estimates, helped by its INTC stake
- European bourses are broadly higher. The FTSE MIB is outperforming, while the AEX and DAX 40 lag. Chip names are weighing on the AEX, and Siemens' earnings are weighing on the DAX 40 (see more below). Outside of earnings, not much in terms of a clear driver as markets await an announcement regarding the reopening of Hormuz.
- Sectors have a positive bias. Media leads, supported by strong WPP (+22.5%) earnings (Q2 operating profit beat estimates). Telecoms and Consumer Products & Services round out the sector outperformers. Basic Resources is the sector laggard, paring back some of Wednesday's gains, followed by Real Estate and Tech.
- Germany had a busy earnings docket today: Commerzbank (+0.7%), Q2 metrics beat and announced the approval of its EUR 1.2bln share buyback; Deutsche Telekom (+5.1%), Q2 Adj. EBITDAaL beat, raised its FY26 FCF guidance and announced the increase of its 2026 share buyback by EUR 3bln; Merck (+1.0%), Q2 metrics beat and raised its FY26 sales guidance; Rheinmetall (-1.0%), cut its FY26 sales guidance after the cancellation of the F126 frigate project; Siemens (-4.1%), raised its FY26 EPS guidance but disappointed investors looking for higher forecasts.
- US equity futures are broadly higher; however, downside is seen in the NQ following earnings by SanDisk and Western Digital, given the focus on AI and memory. SanDisk falls by over 8% pre-market after its revenue outlook missed expectations and pointed to slightly lower margins, while Western Digital is down by nearly 14%, despite earnings and revenue forecasts above consensus.
- Elsewhere, Japan's SoftBank reported earnings. Its Q1 net income beat expectations but fell 18% Y/Y. The Co. said it recorded no investment loss or gain regarding OpenAI, but highlighted its stake in Intel (INTC) has paid off well.
The pattern here is a familiar one for index composition: a single heavyweight's guidance miss drags a cap-weighted benchmark even as the broader tape is higher, the classic divergence between the DAX and its peers on a busy German reporting day. Siemens fits the well-worn template of a raise that still disappoints, where the bar set by prior beats matters more than the printed guidance itself; the tell in such cases is whether the selling is confined to the name or spreads to the industrial peer set. The SoftBank read is equally standard: a conglomerate whose equity story now trades as a proxy for its AI and chip holdings, so its results tend to be parsed for marks on those stakes rather than for operating trends. The storage names selling off despite beats illustrate the elevated expectations embedded in AI-adjacent hardware, where in-line-to-better quarters have repeatedly been met with punishment when the forward outlook merely decelerates. Worth noting is the Hormuz reopening headline sitting underneath the session, since a confirmed resolution there has historically unwound the freight and insurance premium in crude and weighed on the very defence and energy names that have led the European tape. The follow-ons are the US cash open digesting the memory complex and any official confirmation on the strait.