DE40: DAX falls to the lowest levels since February

• DAX loses 3%
• Defensive sectors record smaller declines 
• 10-year bond yields fall near 2.1%
• United Internet lowers forecasts for 2024. 

Record declines in Asian indices have caused strong declines in European markets. Strengthened fears of a recession in the US are causing capital to shift to safer assets, resulting in declines in bond yields combined with strong discounts in equity indices.

The German market is no different, with the main DAX index losing 3% today and falling below 17,200 points for the first time since February this year. Since the beginning of this month, the index has already lost almost 8%.All major sectors are losing on the German stock market today. Defensive sectors such as food and beverages remain the best performers, although they too are seeing discounts.

All 40 companies on the DAX are losing during today's session, although defensive companies such as Siemens Healthineers and Henkel see the smallest declines at around 0.4%.

German 10-year bond yields fell around 2.1% for the first time since early January this year.

Germany's services PMI index reading came in above expectations at 52.5 points (vs. 52 points forecast). The index continues to hover above 50 points, but July's reading marks a continuation of the index's declines and the lowest levels since May of this year. 

Today's session on European markets is marked by strong discounts. All major European indices are losing more than 2.5%. Source: xStation

The worst performing sector on the German stock market is the discretionary goods sector recording a decline of more than 4%. Industrial (-3%) and financial (-3.3%) companies are also doing poorly. Healthcare is recording the smallest declines with a nearly -1.6% discount. Source: Bloomberg Finance L.P.

All 40 companies in the DAX index are down today. Zalando (-8.3%) and Siemens Energy (-6.8%) are the worst performers. Source: Bloomberg Finance L.P. 

The contract for the German DAX index (DE40) is losing more than 3.6% today. It's falling to the levels of the consolidation from February this year. Support set by that month's minima is established at 16945 points, and previous psychological support is at 17,000 points. The contract has been experiencing a dynamic discount for the past three sessions, erasing nearly completely the increases from the first half of the year. The market's negative sentiment may be reinforced by the opening of the US stock market, which also promises strong declines in this environment. Source: xStation 

Company news:  

• United Internet (UTDI.DE) is trading down nearly 18% today. The company lowered its forecast for 2024, projecting revenues of €6.4 billion (vs. €6.5 billion previously) and EBITDA of €1.38 billion (vs. €1.42 billion previously). In the first half of the year, the company's EBITDA was affected by increased spending on mobile network expansion, which rose to €111 million (vs. €40.8 million a year earlier). The company's stock price tumbled to its lowest level since March of this year.
• Infineon Technologies (IFX.DE) has released its results for 3Q23/24. The company reported a slight improvement in sales on a q/q basis (+2%) reaching €3.7 billion. It also managed to improve its gross margin, which stood at 42.2% on an adjusted level (vs. 41.1% in the previous quarter). At the adjusted diluted earnings per share level, the company achieved €0.43 (vs. €0.42 a quarter earlier). Given the weak demand for integrated circuits from the industry, the semiconductor conglomerate missed its sales target by about €100 million and expects full-year revenue to also be about the same amount at about €15 billion. Infineon shares are losing 2.2% and holding up relatively well compared to the technology sector. Profit estimates for Infineon for 2024 and 2025 have already been revised downward due to the events of recent weeks and months. Following the results presentation, analysts do not expect further major revisions for the time being.
• Airbus (AIR.DE) announced that it has received an order from the French Space Agency CNES for two next-generation microwave radiometers. The order will be part of France's contribution to the Atmospheric Observing System (AOS) as part of international cooperation with the US or Canada, among others. The system will provide space-based and suborbital observation of the links between aerosols, clouds, atmospheric convection and precipitation. Airbus will build the microwave radiometers in France, and when completed they will be mounted on two AOS satellites.