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German DAX opened at record levels
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Mercedes-Benz Group shares much lower after cutting financial forecasts
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German producer prices fell 0.8% on the year in August
General market situation: European markets take a little break after the impressive post-FED rally. The German DAX is currently up 0.2% just like the British FTSE 100. At the same time, the French CAC40 is losing 0.4%. The DAX hovers around all-time-high levels. Investors' attention will be mostly focused on Canadian data, as European data are already live. German producer prices fell 0.8% on the year in August. This morning's UK data includes a 1% rise in August retail sales, leading to a 2.5% annual increase, beating the forecast of 1.4%. September consumer sentiment dropped to its lowest level since January.
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Volatility is currently observed in the broader European market. Source: xStation
The German DE40 index is trading at yesterday's highs. The current question is whether the DAX will be able to remain at this level. The first support is located at the previous high of 18,987.7. The next key support may be the mid-July peak at 18,861. Breaking those two levels would open the door for bears to test the 23.6% support or even the 50- and 100-day SMAs. Currently, oscillators are giving bulls ground for further upside, with the MACD increasing and the RSI consolidating near oversold levels. Source: xStation
News
Mercedes-Benz Group (MBG.DE) shares fell as much as 7.7% to a nearly two-year low after the German carmaker cut its 2024 financial forecast and are currently trading at 55 euros per share. The company cited weakness in China as the primary reason for the profit warning. Mercedes now expects Cars adjusted return on sales of 7.5% to 8.5%, down from the previous forecast of 10% to 11%. The company's EBIT and free cash flow of the industrial business are now expected to be significantly below the prior-year level. Analysts from RBC and Jefferies expressed surprise at the magnitude of the cut, with Jefferies noting that the 250 basis-point margin guidance cut is largely due to China.
Deutsche Post AG (DPW.DE) shares are trading 2.4% lower. The decline may be linked to US operator FedEx's warning about slowing business and disappointing quarterly results. FedEx reported adjusted earnings per share of $3.60, well below analyst expectations of $4.77. The company also lowered its full-year earnings forecast to $20-$21 per share. This news may impact other European delivery companies such as IDS, PostNL, Bpost, Austrian Post, and Poste Italiane.
Other news coming out of individual companies in the DAX index. Source: Bloomberg Financial LP
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