A peace deal with pending negotiations

Swedish retail giant H&M is set to release its mid-year report for 2025/26 on 25 June 2026. This comes at a time when the share price has fallen back from a peak at SEK 193 as of 27 February 2026. 

Following the publication of H&M's full-year report for 2024/25 on 29 January 2026, which revealed operating results that were 14% better than expected, the share price reached the previously mentioned peak on 27 February 2026. In the Q1 2025/26 report, released on 25 March 2026, H&M posted EBIT that was 6% above market consensus.

In recent years, H&M's biggest challenge has been its lack of sales growth. Meanwhile, competitor Inditex has sailed ahead with a significantly better sales growth rate. This has created a valuation gap between the companies that is unlikely to close anytime soon. Nevertheless, H&M has slowly improved its operating margins to reach its goal of 10 per cent by streamlining operations and maintaining cost control to improve profitability.

In Q4 of the 2024/25 financial year, H&M achieved an operating margin of 10.7% for the quarter and 8.1% for the full year. Despite achieving a mere 3.0% operating margin in the first quarter, H&M managed to lift the margin to 8.4% over the past twelve months in Q1 2025/26 (February to May 2025/26).

Based on today's share price of SEK 168, H&M is expected to achieve earnings per share of around SEK 8.00. This gives it a price-to-earnings ratio of 21 times its 12-month trailing earnings. For comparison, Inditex's shares are valued at a forward P/E ratio of between 25.0 and 26.5 times.

The H&M share has clearly defensive and less cyclical characteristics. The H&M stock provides an approximate yield of 4.2% through its SEK 3.55 dividend every six months. 

The Stefan Persson family has increased its ownership in H&M to 67% of the share capital and 84% of the votes through a combination of the company's share buybacks and net purchases of H&M shares for its own account. However, an offer for all outstanding H&M shares is still pending and will likely remain so for several years.

Last week, the United States (U.S.) launched new military attacks on Iran, prompting counterattacks from Iran. Risk appetite on world stock markets fell with the Standard & Poor's 500 (S&P 500) trading 4.5% below its annual high, which was reached on June 2. Trump had threatened to take harsh military action against Iran between Wednesday, June 10, and Thursday, June 11, but changed his mind within 24 hours, announcing that the war with Iran was over. Despite Trump having reportedly said on at least 37 previous occasions that a peace treaty was imminent, this time the claim was partly true. On Sunday, June 14, the highest-ranking officials from the United States and Iran signed a 60-day ceasefire agreement. According to Trump, the Strait of Hormuz will open to shipping on Friday, June 19. This will be followed by 60 days of negotiations between the parties on issues on which they have not yet agreed, primarily Iran's nuclear energy program. Rumors of a potential peace agreement have driven up prices on the world's stock exchanges, particularly tech stocks. We believe this is linked to hopes of lower oil prices, which would result in lower inflationary pressure on market interest rates.

On Wednesday, June 17, the Swedish company Elekta will host a capital markets day. The day will begin with a review of the Japanese trade balance and machinery orders for May and April, respectively. Next, we will look at the consumer price index (CPI) and producer price index (PPI) in the United Kingdom (UK) for May. The Swedish Riksbank will announce its interest rate. Next, comes the consumer price index (CPI) for the Eurozone in May. The International Energy Agency (IEA) will release a monthly oil report. The United States (U.S.) will release data on retail sales and business inventories for April and May, respectively, as well as pending home sales for May. The Department of Energy (DOE) will release data on weekly oil inventories. Finally, the Federal Reserve (Fed) will announce its interest rate. To illustrate the latter, we have added a five-year graph of the Federal Funds Rate Projection below.

On Thursday, June 18, an interim report from Accenture in the United States (U.S.) is expected. The macroeconomic data starts with the Eurozone's current account balance for April, followed by an interest rate announcement from Norges Bank. A few hours later, the Bank of England (BoE) will announce its interest rate decision, and the United States (U.S.) will release the Philadelphia Fed index and weekly jobless claims for June.

Several stock exchanges, including those in China, Denmark, Finland, Hong Kong, Sweden, and the United States (U.S.), will be closed on Friday, June 19. In the Nordic countries, this is due to the celebration of Midsummer´s Eve. This Friday's macroeconomic news feed starts with Japan's consumer price index (CPI) for May and the minutes from the Bank of Japan (BoJ) interest rate meeting on April 28. The United Kingdom (UK) will release its retail sales figures for May, and Germany will release its producer price index (PPI) figures for May.

On Monday, the S&P 500 rallied sharply, with a preliminary US-Iran peace accord helping to ease concerns over a broader regional conflict and fears of a potential closure of the Strait of Hormuz. Falling oil prices, which reached their lowest level since March, also supported this rally. Sentiment across the broader equity market also appeared to be boosted by SpaceX's public listing on 12 June, which drew speculative capital back into high-growth equities. 

As the chart below shows, the S&P 500 is currently trading above both the EMA9 and the MA20. The next few sessions should provide a clearer indication of whether this is a so-called 'runway gap' (a continuation move) or if it will be filled in a 'buy the rumour, sell the news' reaction.

On Monday, technology and semiconductor stocks sensitive to interest rates led the rebound in the NASDAQ-100, driving the index up by more than 3% in a single session. This was further supported by robust ongoing demand for AI data centre infrastructure and firmer memory chip pricing. As for the S&P 500, the next few trading days are likely to provide a clearer indication of the near-term direction of the NASDAQ-100. However, the current trading picture is not particularly encouraging in terms of continuation, though this could quickly change.

At the time of writing, US markets were trading more cautiously. The DAX closed lower yesterday and still has some way to go before it can retest its previous highs, which now serve as the first level of resistance. On the downside, the rising MA20 acts as the initial support level.  This is followed by levels around 24,655.

In Sweden, the OMXS30 stalled at the 3,180-resistance level. Breaking above this level would pave the way for a retest of the previous highs of around 3,225. On the downside, the first support level is MA20 at 3,122, followed by 3,079 where MA100 comes into play.

EMA 9: 9-day exponential moving average

Fibonacci: There are several Fibonacci lines used in technical analysis. Fibonacci numbers are a sequence in which each successive number is the sum of the two previous numbers.

MA20: 20-day moving average

MA50: 50-day moving average

MA100: 100-day moving average

MA200: 200-day moving average

MACD: Moving average convergence divergence