Novo Nordisk Surges 4.6% as Wegovy Beats Eli Lilly, Driving Europe's Best Weekly Gain in 3 Months

European stocks wrapped up the week with a solid push higher, putting them on track for their biggest weekly advance in three months. The Novo Nordisk (NYSE: NVO) rally took center stage, climbing 4.6% thanks largely to fresh data showing its obesity drug Wegovy outpaced Eli Lilly's (NYSE: LLY) latest weight-loss pill in a late-stage trial.

The pan-European STOXX 600 edged up 0.2% on Friday, nudging weekly gains to about 2.1%. Most major markets were in positive territory-except for Germany's DAX, which dipped by 0.3%. The overall tone reflected decent earnings reports and renewed bets on possible cuts from the Federal Reserve, driving European stocks up from lows hit five weeks ago.

Corporate results have been generally favorable, with over half of the nearly 200 STOXX 600 companies reporting beating analyst forecasts. Analysts are debating whether the current tug-of-war between persistent inflation and economic slowdown-the so-called stagflation scenario-will start rattling equities more in the coming months.

Not all sectors shared the enthusiasm, though. Munich Re (ETR: MUV2) dropped 7.4% after trimming its insurance revenue expectations for the year, dragging down insurance stocks by nearly 2%, reversing some momentum after recent record highs.

On the brighter side, Thyssenkrupp (ETR: TKAG) rose 2.5% as investors looked ahead to a shareholder vote on spinning off its defense division, fueled by growing European defense budgets. Meanwhile, Belgium's Lotus Bakeries shares jumped 7%, buoyed by solid first-half performance, hinting at its best annual results in over a year.

German IT services firm Bechtle topped the STOXX 600 with a 13.8% surge after confirming its full-year revenue guidance, a rare dose of certainty in this earnings season.

Across the Atlantic, markets gained a bit of momentum after U.S. President Donald Trump named Stephen Miran-a known Fed hawk-to fill a vacant spot on the Federal Reserve's Board of Governors for a few months. Speculation is that this nomination might tilt the Fed toward looser monetary policy, as Trump has been vocal in urging interest rate cuts sooner rather than later.

Meanwhile, Eli Lilly's stock couldn't shake the fallout from the news about its weight-loss drug trial, dropping over 14% amid investor jitters. Quite the contrast to Novo Nordisk's upbeat performance, illustrating just how much hinges on clinical trial results in the pharma space.

That's the market for you: a mix of hopeful earnings, geopolitical developments, and the never-ending guessing game around central bank moves. Will the Fed blink first on rates? And how will that ripple through European stocks next week? We'll see.