DE40 above 200-day EMA ahead of US PPI report 💡

• European indices drop slightly ahead of US PPI data
• Biggest drop in ZEW sentiment index in 2 years
• Brenntag and HelloFresh earnings in the background

Overall market situation:

Tuesday's session on European stock markets brings moderate declines in most stock indexes. Germany's DAX is currently losing 0.06% on an intraday basis. At the same time, France's CAC40 is down 0.30%. Investors' attention turns today to the release of PPI data from the US, which, along with the CPI reading scheduled for tomorrow, will be one of the key aspects defining sentiment for the rest of this week. The reading is scheduled for 1:30 pm BST. 

In Germany itself, attention turns today to ZEW data and quarterly reports from Brenntag and HelloFresh. German economic sentiment readings came in well below expectations. The drop in the economic sentiment index to 19.2 is the largest m/m decline in 2 years. The strongest deterioration can be seen in the sentiment of German exporters, as in addition to the German sphere itself, expectations are also falling for the Eurozone as a whole, as well as for China, an important destination for German exports. 

Volatility currently observed in the broad European market. Source: xStation 

Germany's benchmark DE40 traded nearly 0.16% lower during Tuesday's session. The index broke above a key resistance level set by the 200-day EMA (gold curve on the chart). If the market bulls fail to take dominance over the market and keep the intraday candles above this zone, a further supply reaction could take the index to the region of 17,350 points, where local minima are currently located after the dynamic declines of recent days and the abolition of the 38.2% Fibo of the upward channel initiated in October 2023. Source: xStatio

News: 

Brenntag (BNR.DE) shares are losing nearly 1.4% in today's session after the company delivered a mixed quarterly report and lowered full-year forecasts. The company does not expect gross profit to improve in the second half of the year due to competitive and pricing pressures.

SECOND QUARTER RESULTS

•  Gross operating profit of €1.03 billion
• Gross operating profit in the Essentials segment €730.4 million, estimated €679.1 million
• Gross operating profit in the Specialty Products segment €297.5 million, estimated €329.7 million
• Profit after tax 151.3 million euros, estimated 162.7 million euros
• EPS €1.03, estimated €1.14
• Sales €4.18 billion, estimated €4.15 billion
• Essentials revenue €2.81 billion, estimated €2.53 billion
• Speciality Products segment revenue €1.37 billion, estimated €1.55 billion 

HelloFresh (HFG.DE) shares are gaining more than 10% today, and at the moment of apogee the stock was gaining as much as 23%. The reason for the euphoric reaction of investors was the quarterly results, which turned out to be better than expected. Profitability - as measured by adjusted Ebitda - beat expectations, as the company cut costs and streamlined production capacity as its core meal kit business in the US began to decline.

SECOND QUARTER RESULTS

• Adjusted Ebitda €146.4 million, -24% y/y, estimates €121.3 million
• Adjusted international Ebitda 54.4 million euros, -8.9% y/y
• Adjusted North American Ebitda 132.1 million euros, -21% y/y
• Revenues €1.95 billion, estimates €1.97 billion
• Sales at constant exchange rates +0.9%, estimates +2.45%
• Adjusted Ebitda margin 7.5%, estimates 6.14%
• Average order value €67.10, estimate €67.05
• Orders 28.91 million, estimate 29.47 million
• International orders 12.56 million, estimate 12.59 million 
• North American orders 16.35 million, estimate 17.04 million

ANNUAL FORECAST

• Still expects adjusted Ebitda of 350 to 400 million euros, estimate 360.5 million euros
• Still assumes sales at constant exchange rates +2% to +8%, estimates +4.07%

The company's shares have broken out above the 50-day exponential moving average (blue curve on the chart). Source: xStation 

Other news coming out of individual companies in the DAX index. Source: Bloomberg Financial LP