DE40: Airbus with record order, problems in auto industry

• DAX continues rebound.
• German auto makers lose after Morgan Stanley cut forecasts. 
• A court in St. Petersburg has frozen some of the assets of Commerzbank and Deutsche Bank. 
• Airbus receives largest order in Saudi airline history. 

The DAX is gaining today as investor sentiment reverses. The German index today continues the gains it began in the middle of Friday's session. For the time being, it is registering an increase of about 0.4%. The Communcation Services sector is gaining the most (+1.09%), with the automotive segment weighing most heavily on the index's performance. 
Major auto manufacturers are losing today as a result of analysts at Morgan Stanley lowering their forecasts. The market outlook for the performance of BMW, Porsche and Volkswagen is exaggerated in their view. The main risk for these companies is their exposure to the Chinese market. In BMW's case, China is its largest market. In 2023 Asia-Pacific (which includes China) was responsible for 38% of Volkswagen's sales, which makes it its second-largest market. The specter of a deepening trade war between China and the US hangs over the companies, with the European Union slowly joining in. It plans to impose tariffs on Chinese electric vehicles, which, of course, could result in a deterioration of trade relations in the automotive market between the continents. This scenario is especially hurtful for European automakers. Thus, shares of BMW, Porsche and Volkswagen are losing in today's session. 

Companies from DAX index. Source: Bloomberg Finance L.P. 

Contract for DAX index (DE40) in 1H interval is trying to break resistance around 18850 pts. It has started to reverse a short term trend, which it had followed since 15th of May. Now, if the bullish side takes control, investors can look forward to breaking resistance around 18962 pts., which is the first important level. On the other hand, bearish scenario settles the first important support line around lows from this week on the level of 18738,6 pts. Source: xStation

Company news:

• Mercedes-Benz (MBG.DE) has also caught on to the negative sentiment in the automotive market, although it has not seen its forecasts lowered. The downside potential in the company's margins has already been partially priced in, hence its decline potential is not as large as those of other car manufacturers. Moreover, the company is conducting an aggressive share buyback program, which allows it to offer investors an attractive rate of return.
• Siemens Energy (ENR.DE) is likely to decide to sell its wind turbine division in India. According to estimates, the sold division had an average annual turnover of $700 million. The company is losing -1.84% after these speculations. 
• A Russian court has decided to freeze the assets of Deutsche Bank (DBK.DE) and Commerzbank (CBK.DE). The decision was made at the request of RusChimAllianz, a subsidiary of Gazprom, which is making claims against the German banks respectively of €239 million and €95 million. Bank stocks reacted mixedly to the news. Deutsche Bank is down 0.5%, while Commerzbank has gained 0.3%. 
• Airbus (AIR.DE) has received an order from the Saudi Group for 105 narrow-body passenger aircraft. It is the largest such order in the history of a Saudi airline. Although the company did not announce the value of the contract, Future Aviation Forum, where the information was first published, estimates that the order totals $19 billion. According to the Saudi Group CEO, the first planes are expected to be delivered in Q4 2026, while the last units are scheduled for 2032. Airbus is up 1.43% today.