DE40: DAX treads water as sector divergence continues, VW labor deal weighs

• European markets show mixed performance, led by Austrian AUT20
• Volkswagen Labor Deal Misses Cost Targets
• Deutsche Post Announces Mail Service Overhaul
• Commerzbank Works Council Warns of UniCredit Job Cuts
• Porsche Holdings Reports Sharp Drop in Short Interest

General market situation: European markets are showing mixed performance, with several indices trading higher. The Austrian AUT20 leads gains (+0.58%), followed by the French FRA40 (+0.36%) and Spanish SPA35 (+0.26%). The Dutch NED25 is also positive (+0.19%). On the downside, the Polish W20 shows the steepest decline (-0.49%), followed by the German DE40 (-0.20%) and Swiss SUI20 (-0.19%). The UK's UK100 (-0.05%) and pan-European EU50 (-0.12%) show more modest losses.

Dax Returns by Sector. Source: Bloomberg Financial LP

Looking at the German DAX sector performance, Information Technology leads gains (+1.01%), followed by Consumer Discretionary (+0.23%) and Health Care (+0.22%). Materials (+0.20%), Real Estate (+0.14%), and Industrials (+0.11%) are also trading in positive territory. On the downside, Financials show the largest decline (-0.81%), followed by Communication Services (-0.66%) and Utilities (-0.34%). Consumer Staples (-0.30%) also trades lower. The aggregate DAX performance shows a modest gain of 0.03%, with market breadth positive as six out of ten sectors trade higher.

Volatility is currently observed in the broader European market. Source: xStation

The German DE40 Index is consolidating in 20050 zone. The RSI is stabilizing in the neutral zone. Additionally, the MACD, after forming a bearish crossover, is widening to the downside.

For bears, a retest of the October high at 19,783 could accelerate the downward momentum. A decisive break below this level could lead to a retest of the early November high at 19,525, which aligns closely with the 50-day SMA at 19,677, establishing a critical support zone.

For bulls, the 161.8% Fibonacci retracement level at 20,566 remains the key resistance. This level has played a pivotal role in recent sessions and could act as either a springboard for further bullish advances or a threshold marking the onset of bearish divergence. Source: xStation

Corporate News

• Volkswagen (VOW3.DE) Labor Deal Falls Short of Market Expectations - analysts criticized the company's agreement with labor unions as missing cost reduction targets. The deal aims for €4 billion in annual savings and 35,000 job cuts through 2030, but Jefferies notes it "falls short of management's stated ambitions," while Bernstein highlights concerns over previous cost-cutting failures. JPMorgan views it as a "step in the right direction" but notes benefits may only materialize post-2025.
• Deutsche Post (DPW.DE) Announces Major Mail Service Restructuring - The logistics giant will implement significant changes to its national mail delivery service starting 2025, extending delivery times to three business days for 95% of letters by 2027. Standard letter prices will increase from €0.85 to €0.95, while maintaining next-day delivery options for business customers. The stock edged up 0.26% to €34.99 despite being down 5.51% monthly.
• Porsche Holding (PAH3.DE) Sees Sharp Drop in Short Interest - Short interest in Porsche decreased 86.8% to 4,200 shares as of December 15th, down from 31,800 shares on November 30th. The current short-interest ratio stands at 0.0 days based on average daily trading volume of 1.54 million shares.
• Commerzbank (CBK.DE) Works Council Warns of UniCredit Takeover Risks - Outgoing works council head Uwe Tschäge warned that a potential UniCredit takeover could result in 15,000 job cuts, representing two-thirds of German workforce. UniCredit currently controls approximately 28% of Commerzbank shares, prompting government intervention to discourage takeover attempts.

Other news coming from individual DAX index companies. Source: Bloomberg Financial LP