- The DAX declines in the first half of the day
- Euro and USD strengthen
In the second day of this week, futures contracts on major European indices experience a weaker cash session. Most indices fall between 0.25-1.10% in the first half of the day. The Spanish IBEX 25 futures see the largest drop of 1.10%. The German DAX index is down by 0.50%, staying around 18,200 points.
After the publication of GDP data for the Eurozone, indices attempt to rebound. The report was better than expected, suggesting a slightly better state of the European economy. Along with the indices, the Euro gains even more, becoming the strongest G10 currency. Besides the GDP report, we also saw April inflation data. Core inflation met expectations at 2.4%. However, core data were also higher than expected, confirming the concerns of European Central Bank Vice President Luis de Guindos about the risk of another rebound. De Guindos emphasized yesterday that the geopolitical situation, particularly in the Middle East, poses a particular risk to inflation.
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Create account Try a demo Download mobile app Download mobile app- De Guindos stated in a speech that if tensions in the region escalate further, significant disruptions to trade and oil supply chain obstacles could lead to higher energy prices and freight costs in the near term, disrupting global trade.
DAX
The German index is down 0.50% today, with bulls trying to partially recover losses following the GDP data release. The index price responded to a short-term support line marked in blue (dashed line). Growth is limited from above by the nearest resistance zone around 18,400 points, currently about 0.95% higher.
Source: xStation 5
Company News
Mercedes-Benz (MBG.DE) dips 3.80% following the Q1 earning report. Mercedes had a weaker than expected start to the year due to supply chain issues and model changes. In the first quarter, turnover fell by 4.4% to €35.9 billion ($37.4 billion), and earnings before interest and taxes dropped nearly 30% to €3.86 billion. The company's passenger car division saw its adjusted operating profit margin slip by 5.8 percentage points to 9.0%, with declines in sales and model changes in the top segment negatively impacting results. Mercedes-Benz reported a consolidated profit of €3.03 billion, down by about a quarter from the previous year, but confirmed its annual forecasts.
Source: xStation 5
The report affected market sentiment, leading to over 2.00% declines for BMW (BMW.DE), Porsche (P911.DE) and Volkswagen (Vow1.DE). BMW declines are also accelerated by the recent announcement that the company will pay a slightly lower dividend of €6.00 on May 21, a reduction from last year's comparable dividend.
Source: xStation 5
Vonovia (VNA.DE) gains almost 4.00% after the company reported its quarterly earning report. Vonovia returned to profit in the first quarter, despite the sector facing its worst crisis in decades. The company announced it expects property values to bottom out this year. Vonovia reported a profit of 335.5 million euros ($359 million), bouncing back from a loss of 2.088 billion euros a year earlier. The company sees a return to growth in sight and aims to focus on increasing earnings from 2025 onwards.
Source: xStation5
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