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DE30 under downward pressure
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Deutsche Post loses ahead of weak FedEx results
This week's final session on stock markets brings a weakening of sentiment on the Old Continent. The German DAX is currently losing nearly 1.7%. On the macroeconomic calendar today we find European inflation readings and UoM sentiment data. Today is also the day of the three witches, so investors can expect more volatility in the evening hours.
Data:
A revision of inflation data from the Eurozone came in line with analysts' consensus (9.1% y/y; vs. expectations of 9.1% y/y). Acceleration, however, was indicated by the monthly reading (0.6% m/m vs. expectations of 0.5% m/m).
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Source: xStation 5
The swap market is currently pricing in an 85% chance of a 75bp rate hike at the ECB's October meeting. Source: Bloomberg
DE30 index chart, D1 interval. The benchmark of German blue chips is trading down today and descending towards the September 5 minima. Source: xStation 5
The last session on the German stock market this week brings declines in all sectors of the economy. Industrial companies and discretionary goods companies are currently under the most downward pressure. Source: Bloomberg
Banks JP Morgan and Goldman Sachs are eyeing the real estate sector, which is currently battling with retail companies to be named the worst performing sector this year due to the interest rate hike cycle.
Yesterday's weak FedEx results and JP Morgan's downgrade put a lot of pressure on the shares of Deutsche Post (DPW.DE), whose stock is currently down more than 6%.
Despite the big sell-off, the banking sector is doing relatively better, benefiting from the ECB's hawkish turnaround.
Bank recommendations:
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Cowen and Company cuts its target price on Adidas (ADS.DE) shares from €188 to €155.
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JP Morgan cuts its target price on Deutsche Post (DPW.DE) shares from €58 €52.5.
The largest percentage changes of companies included in the DAX index. Source: Bloomberg
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