Post-election rally lifts DAX to a record
The DAX reached 26,644.33 points, surpassing its August record of 26,618.74, according to FAZ. The wallstreetONLINE morning report had shown the index approaching that milestone at 26,611.54, up 0.66%.
After the sharp post-election gains, market expert Thomas Altmann said sustaining the rally would depend chiefly on whether new buyers entered at the higher prices. Technology and artificial intelligence stocks remained a focus: the Nasdaq 100 had lagged the previous day, gaining less than 1%, amid investor concerns about slower AI expansion and tighter regulation.
Oil's retreat helped ease inflation concerns. FAZ reported that prices fell from more than $100 to around $95 a barrel after the election. Gold moved back above $4,000 to $4,126 per troy ounce, while demand for government bonds lowered the 10-year German Bund yield to 3.271%. The euro was unchanged at $1.1232.
Rheinmetall lowers forecasts despite strong quarterly growth
Rheinmetall's outlook cut contrasted with its third-quarter growth. In an announcement on the evening of November 4, the company reduced its expected 2026 revenue to about €13.2 billion from a range of €13.7 billion to €14.2 billion. It now expects an operating margin of around 18.5%, compared with roughly 19% previously.
The company cited several delays. A major German order under Arminius, the project to modernize the Bundeswehr's Boxer wheeled armored vehicle fleet, is now unlikely to arrive in 2026. That would shift the related advance payments and revenue into 2027. Delayed batch acceptance of artillery ammunition also contributed, as did revenue below plan from new weapons and ammunition activities, notably the cooperation with Dutch company Destinus.
For the quarter ended September 30, revenue increased 32% to €3.149 billion from €2.308 billion a year earlier. Operating profit grew 62%, reaching €553 million versus €342 million, and the operating margin widened from 14.8% to 17.5%. Rheinmetall described order intake of €2.893 billion as good, though slightly lower. For the first nine months, revenue rose 38% to €8.4 billion, while operating profit increased 69% to a record €1.339 billion.
November's reduction was Rheinmetall's second revenue-forecast cut of 2026. The first came in August after Germany canceled the F126 frigate program, in which the company had expected a major role. The cancellation took €300 million out of its expected annual revenue. Euronews reported that the shares had lost more than 48% since the start of the year as of November 5. The stock listing accompanying the wallstreetONLINE report showed Rheinmetall at €831.90, down 14.4%.
JPMorgan responded to the warning by lowering its price target from €1,350 to €1,150 while retaining a "Neutral" rating. Analyst David Perry questioned the long-term revenue potential of some army products and the targets attached to the numerous joint ventures announced since October 2024. He warned that Rheinmetall might also need to lower its 2030 targets.
European defense shares fall
Rheinmetall's decline pulled other European defense stocks lower on November 5. At around 10 a.m. CET, BAE Systems had lost more than 4%, Leonardo 2.8%, Saab 2.7%, Babcock 1.3% and Thales 0.9%, according to Euronews.
The sector had already fallen on Wednesday amid concerns that the Democrats' election victory would bring stricter oversight of US military spending. Robert Stallard of Vertical Research Partners predicted closer congressional scrutiny of defense policy and spending.
Toyota raises outlook and creates robotics division
Toyota shares climbed about 15% in Tokyo on November 5, their biggest one-day gain since the 2008 global financial crisis, after the automaker raised its forecast for the fiscal year ending March 2027, FAZ reported.
The company lifted its operating profit forecast by 15% to ¥3.9 trillion, or about €22 billion. It expects annual revenue of ¥53.5 trillion, about €300 billion and 5.6% above the previous year. Toyota cited strong hybrid-vehicle sales and a weak yen. Its US business also returned to profit after a loss in the preceding quarter.
Alongside the results, Toyota announced a dedicated robotics division to bring together its existing work in the field. Production chief Takefumi Shiga will lead the division, whose aim is to accelerate the practical application, commercialization and use of robots, particularly in production. The initiative follows similar moves by Asian peers, including Hyundai through Boston Dynamics and BYD.
Handset weakness weighs on Qualcomm
Qualcomm's fiscal fourth-quarter 2026 results, released November 4, showed adjusted earnings of $2.17 per share, just above the $2.16 expected, on adjusted revenue of $10.44 billion, according to CNBC. But handset chip sales dropped 26% from a year earlier to $5.14 billion, missing the $5.21 billion estimate. Higher memory costs raised phone prices and hurt demand.
Other businesses grew: automotive chip revenue rose 89% to $1.99 billion, while Internet of Things revenue increased 4% to $1.88 billion.
Qualcomm forecast current-quarter earnings of $2.15 to $2.35 per share, compared with analysts' expectation of $2.27, and revenue of $10.4 billion to $11.2 billion. Shares fell about 7% in extended trading. The listing accompanying the wallstreetONLINE report showed the stock down 9.13% at €139.50.
