Leonardo raises 2026 guidance after first-half profit jump

Leonardo was one of the main standouts after reporting first-half adjusted profit up 74.4%, EBITA up 34.4% and orders of €16.3 billion, prompting it to raise 2026 guidance for profit, orders and cash flow. That kind of performance reinforces the appeal of European defense names, which continue to draw buyers on the back of higher spending and resilient demand.

The broader market tone was helped by signs that manufacturing activity is still expanding in the US, even as China's industrial growth eases and the UK shows more mixed momentum. For investors, that combination supports the case for selective exposure to Europe rather than a blanket bet on the region.

Index-level pricing reflected the same pattern. VGK, the Vanguard FTSE Europe ETF, has climbed to $90.82 from $75.78 in late November and now trades above its 50-day and 200-day moving averages, with the relative strength index at 63.3, suggesting steady upside momentum. Germany-focused EWG also rose to $43.31, while France's EWQ advanced to $46.94, both pointing to firmer continental sentiment than in the UK.

Still, London's lag shows how uneven Europe's advance remains, with investors rotating toward stronger earnings stories and away from markets that lack a clear growth catalyst. The next test will come from fresh regional data and company updates, which will show whether the continent's rally broadens beyond defense and a handful of cyclical winners.