DE30: DAX retains gains after ambiguous NFP report!

• DAX extends dynamic upward wave

• NFP does not change stock market sentiment

• Lulumenon results support Adidas (ADS.DE) and Puma (PUM.DE) share prices

• Uniper under heavy downward pressure

The last trading session on European markets this week brings a strengthening of bullish positions. The German DAX index (DE30 contracts) broke above the 16,000-point barrier and is struggling to break above the peak structure from earlier in the week. The No.1 topic for investors today was the reading of the US labour market report, which, however, failed to move the market permanently. 

Details of the NFP report:

NFP reading: 339k (expected: 180k; previous: 253k).

Private employment: 283k (expected: 160k; previous: 253k).

Employment by household: -310k (previous: 139k)

Unemployment rate: 3.7% (expected: 3.5%; previous: 3.4%)

Wages: 4.3% y/y (expected: 4.3% y/y; previous: 4.4% y/y)

A strong rise in the unemployment rate, with a powerful rise in employment. However, it is worth bearing in mind that these figures are from separate surveys - one of businesses, the other of households. 

The mood in Europe during Friday's trading session is clearly positive. Sentiment is slightly worse in the utilities sector. Source: xStation 5

News:

The market was surprised by very positive results and forecasts from US retailer Lulumenon, whose shares are up nearly 14% today ahead of the Wall Street open. A strong report from the apparel retailer and the prospect of a stimulating economy in China, which accounts for a portion of the revenues of many, European brands, are today driving share price gains in key German footwear and sportswear manufacturers Adidas (ADS.DE) and Puma (PUM.DE), the shares of both companies gaining 5 and 4.5% respectively today. 

Looking at Puma's shares, they appear much more attractively valued from a fundamental perspective, but the brand strength is correspondingly less than Adidas. Both companies grew revenues y/y in 2022 at a comparable rate. In the most recent quarter, Puma reported a 5.36% net margin against Adidas' modest 0.42%, which was indirectly due to the Yeezy brand line debacle.

Stock charts of Adidas (ADS.DE) and Puma (PUM.DE) on the W1 interval. Source: xStation 5

The shares of Uniper (UN01.DE), the German energy operator threatened with bankruptcy in 2022 amid the Nordstream project disaster, are losing almost 20% today. 

According to information from the company, the UAE's oil processing and marine fuel trading unit, Energy DMCC, has been completely sold to Swiss shipowner Montfort and the family office of Sheikh Al-Maktoum, who is linked to the ruling family in Dubai. 

The transaction has received all necessary approvals and follows a decision by the EC - the German company has received substantial financial aid in 2022. After an impressive rally in 2023, Uniper's overbought shares are trading down quite a bit today.

 The company's sold unit, DMCC was a market leader in the production and supply of low-sulphur fuel oils - the products met IMO 2020 standards in the market of the UAE's key shipping hub, Fujairah.

Uniper (UN01.DE) share chart, D1 interval. Source: xStation5 

Changes in institutional holdings in individual companies of the DAX index (last session's data). Source: Bloomber

Major percentage changes and information from individual companies in the DAX index. Source: Bloomberg

DE30 chart

Futures based on the German DAX index (DE30) are trading up today and have emerged above the zone of important levels defined by the 50-day exponential moving average (blue curve) and the psychological level of 16,000 points. Source: xStation 5