- European markets mostly in the green
- Trump's conference boosts shares of European defense companies
- TeamViewer reports preliminary results above expectations
- Siemens Energy drops after downgrade to “hold” and concerns over the future of projects in the US
Today's trading on European markets reflects a generally moderate optimism among investors. The Italian ITA40 index (+0.9%) and the Swiss SMI (+0.8%) lead the gains. Positive sentiment is also visible on Germany's DAX index, which is up 0.5% today, continuing its New Year rally. The German index is nearing the 20,450-point threshold, having risen by 2.7% since the start of the year.
The European defense sector is experiencing strong gains, boosted by Donald Trump's remarks suggesting the need for increased NATO members' defense spending. The U.S. president-elect emphasized during yesterday's conference the need to raise spending to 5% of GDP, more than doubling the current target. Since the U.S. elections, defense companies have significantly outperformed the broader European market, with Trump's latest statements further supporting the sector's positive sentiment.
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European defense companies are recording higher gains than the broader European market. Source: Bloomberg Finance L.P.
On the German market, Rheinmetall leads the gains, rising nearly 5% amid strong sentiment toward the sector. Other notable performers include Heidelberg Materials (+3.9%) and Continental (+1.9%). Siemens Energy is the weakest in the index, declining by more than 5%.
Sector-wise, the worst sentiment is seen in Utilities (-0.5%) and Real Estate (-0.2%), while IT (+1.2%) and Financials (+0.8%) show the strongest growth. On the German market, 65% of assets are posting gains today.
Performance of the stocks in the DAX index. Source: Bloomberg Finance L.P.
The breakdown of the DAX index by sectors. Source: Bloomberg Finance L.P.
Volatility on the European stocks. Source: xStation
The DAX (DE40) futures contract is reaching new highs, breaking through the 20,569-point level. With the breakout above the 20,459-point resistance, the contract's recent behavior suggests a potential upside target of 21,111 points. In the event of a pullback below the 20,460-point level, the first support is located at 19,870 points. Source: xStation.
Company news:
- TeamViewer (TMV.DE) reported preliminary results for 2024 that exceeded both its own expectations and market consensus forecasts. The company’s estimated revenue for 2024 reached €671 million, surpassing the forecast of €665.1 million. TeamViewer itself had projected revenues within the range of €662-668 million. The primary driver for exceeding expectations was the significantly better performance of its large enterprise segment in the final weeks of Q4. Despite these strong preliminary results, the adjusted EBITDA margin forecast for 2024 remains unchanged at 44%. The stock is up nearly 10% today.
- Rheinmetall (RHM.DE) is up nearly 5% following yesterday's press conference by Donald Trump, during which the incoming U.S. president emphasized the need for increased NATO defense spending. In addition to the broader sector rally, Rheinmetall is also benefiting from the confirmation of a contract for 120 mobile aid stations for the German armed forces. The order is valued at several tens of millions of euros, with the official signing expected in January this year. Initial deliveries are planned for December 2025.
- Siemens Energy (ENR.DE) is among the weakest performers on the German market today, with shares down over 5%. The decline follows a downgrade by Kepler Cheuvreux from "Buy" to "Hold." Investors are also concerned about the future of the company’s key wind farm projects after Donald Trump’s comments yesterday suggested halting wind farm construction.
- Mynaric (M0YN.DE) is down more than 20% today after the company lowered its full-year 2024 financial forecasts. Mynaric now expects revenues of €14.1 million, compared to its earlier guidance of €16-24 million. The company also estimates that orders in its optical communications terminal segment dropped to 787, compared to prior estimates of 800-1,000 orders.
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