DE40: DAX with the worst week performance in 2024

• DAX continues declines, recording its worst week this year
• Euro 2024 is expected to deliver more than €1 billion to the German economy 
• Defense stocks fall after profit-taking 
• U.S. investor steps up efforts to acquire stake in Thyssenkrupp Marine Systems (TKMS) 

The DAX is finishing this week with declines. The index is losing more than 1.2% today, which means, that for the whole week its value decreased more than 4%. Thus, the index is back to its early May value, completely erasing the gains of May and early June. Investor sentiment is firmly grounded in the risks associated with the new French elections, which reinforce the uncertainty created by the European Parliament elections. The German stock market also remains under strong pressure related to a potential EU tariff war with China. 

Today marks the start of the UEFA European Championships 2024, which are being held in Germany. According to a forecast by the Ifo Institute, fan arrivals from across Europe could generate as much as €1 billion in tourism revenue for the German economy. This includes both accommodation costs and potential consumer spending. Thus, theoretically, the service and consumer goods sectors stand to gain the most from the European Championships. 

The last major football-related event was held in Germany in 2006, when the World Cup took place. This caused a surge in Germany's consumer confidence index. However, it's hard to expect a repeat of such a result in today's environment, since at that time the index was in a strong upward trend, and with current conditions the index is taking negative values. 

Commerzbank and Rheinmetall lead today's declines. Most of the stocks in DAX index also are losing at the end of the week. Source: Bloomberg Finance L.P. 

Industrial stocks are among the worst performing stocks in DAX index with over 2% decline. Negative momentum is also seen on Financials (-1.3%). Consumer Discretionary also decreases with the pressure from potential tariffs' war with China. Source: Bloomberg Finance L.P. 

This week's change in price is the worst in the whole year. Such strong decline was last seen in September 2023. Source: Bloomberg Finance L.P. 

DAX index (DE40) lost all its increases from May and early June. Now it is traded around 18026 pts, which makes it test the psychological barrier of 18000 pts and support from consolidation level around 17985 pts. If the contract breaks those levels we might see further declines towards April's lows around 17610 pts. Today the contract has broken bottom barriers of downward trend which might be considered as another bearish sign. Source: xStation

Company news: 

• Thyssenkrupp (TKA.DE) is gaining more than 1% today after news of potential progress on U.S. private equity firm Carlyle's acquisition of part of Thyssenkrupp Marine Systems (TKMS). On the one hand, for an external investor, this means the possibility of exposure to the arms sector in Europe, which is becoming increasingly important to the economy in the wake of the war in Ukraine. On the other hand, Thyssenkrupp has been looking for an investor for some time to sell part of its stake in its subsidiary, and progress on this matter would make a positive signal to investors. 
• Rheinmetall (RHM.DE) is losing more than 5% today, which may be due to profit-taking on the German defence sector. The company has risen 67% since the beginning of the year. However, over the past two months, the company's stock price has remained in a sideways trend. 
• Airbus (AIR.DE) is losing 2.7% today. The company is being pushed down by movements in the defense sector, with the declines further reinforced by news of an FAA investigation into potentially falsified documents regarding the authenticity of titanium used in the manufacture of Airbus and Boeing aircraft. The investigation was launched after small holes were found in the materials used to make the planes.