European stocks set for longest monthly winning streak since 2021
European stocks climbed on Friday, capping off their strongest January rally in years as robust earnings from Adidas and Swatch bolstered investor confidence amid lingering concerns over geopolitical tensions and U.S. trade policies.
The pan-European STOXX 600 index rose in early trading and headed toward a monthly gain of about 2.6 percent, marking its seventh consecutive monthly advance; the longest such streak since 2021. Germany's DAX surged 1 percent, France's CAC 40 added 0.5 percent, and Britain's FTSE 100 edged up 0.2 percent.
Adidas shares jumped as much as 5.8 percent in Frankfurt after the German sportswear giant revealed plans for a share buyback of up to 1 billion euros, equivalent to 1.2 billion dollars, in 2026. The company posted record 2025 sales, with adidas brand revenues up 13 percent at constant exchange rates for the second straight year, driven by double-digit growth across all markets and distribution channels. Annual revenue hit 24.8 billion euros, while operating profit climbed by more than 700 million euros to 2.06 billion euros. "Double-digit growth across all markets and channels is of course very satisfying, but even more important is that it is high-quality growth," CEO Bjørn Gulden said in a statement.
Switzerland's Swatch soared more than 7 percent following news of 4.7 percent sales growth at constant exchange rates in the second half of 2025, including a 7.2 percent rise in the fourth quarter. The watchmaker noted that this positive momentum carried into January 2026 across all price segments.
Investors also digested U.S. President Donald Trump's announcement that he would nominate former Federal Reserve Governor Kevin Warsh to lead the central bank, replacing Jerome Powell when his term ends in May. Trump praised Warsh on Truth Social as "one of the GREATEST Fed chairs, maybe even the best."
Economically, France's economy expanded 0.2 percent in the fourth quarter, while Germany's unemployment held steady at 6.3 percent in January. The European Central Bank is expected to leave interest rates unchanged at its upcoming meeting. Still, some analysts cautioned that early-year optimism could spur excessive stock buying, with sustained momentum hinging on continued corporate earnings strength.
