- DAX with gains ahead of US inflation data
- Oracle's strong results may give positive sentiment to SAP
- Evotec achieves new milestone with progress in partnership with Bristol Myers Squibb
- Automakers' stocks fall on reports of potential lawsuits in the UK
Today, the United States and CPI are the main topic for investors. The market expects the Fed's evening decision to leave interest rates unchanged, and most economists expect a maximum 0.3% increase in m/m inflation. Thus, there is a risk of a strong surprise to the markets if the data turns out to be worse. Since the beginning of the year, we have seen a shift in the markets' expectations for the first interest rate cuts, which investors had previously expected as early as June. Now the data and the Fed's narrative indicate that such a scenario is highly unlikely, and expectations have shifted to the September-November period.
The German market is, for the time being, recording a positive rebound after the declines earlier in the week. However, the index's potential post-2:30 p.m. trading could be shaken if US CPI proves disappointing. For now, the DAX is gaining more than 0.4%, with financial institutions being the strongest sector with more than 1.1% gains. The upward momentum is also maintained today by Heidelberger Druckmaschinen, which is gaining more than 4% today after yesterday's solid results.
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Siemens Energy continues positive momentum from yesterday gaining more than 2%. Financial institutions also support today's gains. Worst performing sector are carmakers, with overall decline over 0.7%. Source: Bloomberg Finance L.P.
DAX's contract (DE40) declined yesterday under SMA50 level, coming closer to first important resistance level around 18394.4 pts. This is its main support in short-term corridor, which the contract has been following for the last two weeks. The downward break-out might increase bears' pressure, therefore leading the contract to further declines, following downward trend from the beginning of May. On the other hand, if positive momentum in today's session is held, bulls might observe the resistance level around 1867.3 pts. Breaking it might open the way to testing the corridor's resistance levels. However, with CPI coming up later this day, we do not see such a strong upward potential. Source: xStation
Company news:
- SAP (SAP.DE) is gaining more than 0.5% today after strong results from rival Oracle. In addition to the strong financial data, Oracle announced more collaborations with technology giants in the area of artificial intelligence. The strong condition of the sector despite already high expectations positively encourages further results from technology companies. SAP will present its financial report on July 22.
- The strongest losing companies today are car manufacturers. Porsche (P911.DE) is losing more than 6% today due to the dividend cut. After taking this adjustment into account, the Stuttgart-based company loses -2.8%. BMW (BMW.DE) together with VW (VOW1.DE) are down almost -1.5% today. Declines in automotive stocks are bolstered by potential lawsuits in UK on diesel car emissions. Reuters reports that manufacturers face 1.5 million lawsuits totaling $7.5 billion. The lawsuits are related to the falsification of data during vehicle emissions tests.
- Evotec (EVT.DE) rose more than 3% at the open today, thanks to the development of its partnership with Bristol Myers Squibb. The drugmaker made new progress in connection with its neurology work, reaching a new milestone and paying $20 million to the company.
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