DE40: DAX slightly rebounds after yesterday's post-election decline

• DAX rebounds after yesterday's discounts 
• Lagarde's speech at ECB set to keep interest rates on hold 
• Siemens Energy plans to build a new wind turbine
• Heidelberger Druckmaschinen showed results in line with its forecasts 
• More challenges on Lufthansa's path to acquire Italy's ITA Airways

Yesterday brought higher volatility in the European market due to the election results. Today, at the beginning of the session, we are seeing a slight unwinding and small rebounds. The German DAX opened at 0.2% plus, as did the Euro Stoxx 600. 

During yesterday's speech, ECB President Lagarde stressed that the ECB is not on a linear path of interest rate cuts. According to her, the ECB is willing to wait a few meetings without changing interest rates if the data coming out of the economy requires it. This means that the latest cut did not put the ECB on a dovish monetary policy path at all. The statements are in line with the narrative so far maintained by the ECB, hence it is hard to talk about a strengthening of the demand side in European markets, including Germany, after the central bank's decision. 

Most stocks in DAX index are showing slightly rebound. However, in most cases those are only improvements after yesterday's declines. Source: Bloomberg Finance L.P. 

Contract replicating DAX index (DE40) shows slight rebound from support level around 18394.4 pts., which was indicated by local April highs. Now the contract is traded between indicators SMA50 and SMA20. Those averages support sideways canal between 18394.4 pts and 18675.3 pts. Market geometry also indicates that in the short-term the contract might be restrained from by the resistance level of 18675 pts. However, if DE40 sees stronger demand and break beyond this level it still has some space before indicating break out from the declining channel created at the beginning of May. Source: xStation

Company news: 

• Siemens Energy (ENR.DE) plans to build a new wind turbine. It is expected to produce 21 MW worth of power, making it the largest of the company's existing turbines. The company plans to develop the turbine before the end of the decade to combat growing competition from China. The company is up more than 1.2% today. 
• Lufthansa (LHA.DE) has been planning for months to acquire part of the state-owned Italian airline ITA Airways. However, the acquisition, despite support from the Italian government and the airline itself, is being challenged by antitrust concerns from the European Commission. The Commission's main concern is Lufthansa's excessive share of long-haul routes to North America. In order to solve this problem, Lufthansa has committed to hold part of the ITA business separate for two years. Now, however, according to media reports, the Commission expects as much as a 10-year period to compensate for the US route problem. Finalizing the deal would mean that the German airline would scale up its operations and strengthen its performance. Hence, potential impediments along the way are causing discounts on the company's shares, which lost nearly 0.5% today. 
• Heidelberger Druckmaschinen (HDD.DE) is gaining more than 3% today following the release of its financial results for FY2023/24. Although they came in below market consensus expectations, which was reflected in the session opening -1.2% below yesterday's closing price, the company recovered quickly after the opening. The company maintained both revenues and orders at similar y/y levels, which was in line with the company's forecasts. The company managed to avoid earnings erosion despite rising raw material, energy and wage costs. Adjusted for one-time events, free cash flow reached its highest value in 10 years. The company also announced a partnership with Canon in the area of industrial inkjet printing, which is expected to open up new areas for growth for the company.

Source: Heidelberger Druckmaschinen