DE30 muted ahead of German inflation reading

• DE30 muted ahead of German inflation reading and U.S. GDP 

• Inflation reading at 13:00 BST

• Volkswagen (VOW1.DE) surprises with good quarterly results

Market sentiment during today's trading session on European trading floors is mixed. The German DE30 is down 0.3%, the French FRA40 is losing 0.09%, and the Polish W20 is gaining 1.47%.

Stock markets reacted positively to yesterday's US rate hike and Powell's comments. The Fed raised interest rates by 75 basis points yesterday - in line with market expectations. Powell was rather optimistic about the economy and said that the US is not in recession. Nevertheless, the Fed chief pointed to the deteriorating macro situation and stipulated that the pace as well as the size of the hikes could slow down. However, it is worth remembering that the fundamental situation has not improved. The gains of the morning have been mostly negated and the benchmarks are currently recording moderate declines. In Germany, attention will focus today on the CPI and HICP inflation readings for July (13:00 BST). On an annual basis, CPI inflation is forecast at 7.4% (earlier reading of 7.6% y/y). Land-specific data suggest that the reading may be in line with analysts' consensus.

DE30 index chart, H4 interval. The situation on the Dax has not changed much since the last analysis. The blue-chip benchmark is seeing declines today and remains below the 200-period exponential moving average (golden curve). From a technical point of view, the closest supports are the EMA 100 (purple curve) and the EMA 50 (blue curve). The psychological level of 13,000 points is also an important point. The most important resistance invariably remains the 13,450 point zone and currently the EMA 200. Source: xStaton 5

News:

• Volkswagen (VOW1.DE) shares are trading up nearly 3% during today's session following the release of better-than-forecast second quarter results. The company's revenue reached 69.54 billion euros, up 3.3% year-on-year. Analysts had forecast a result of 66.64 billion euros. Shipments figures were slightly weaker, coming in at 1.98 million units in Q2 against expectations of 2.1 million units. Operating margin was 6.5% and operating profit was €4.51 billion (-31% y/y). In the first quarter, revenue was €132.29 billion and operating profit was €12.83 billion. Volkswagen reaffirmed annual forecasts and conveyed that logistical problems are waning.

• Shares of Wacker Chemie (WCH.DE) also posted gains, reacting to strong financial results. The company benefited from continued high demand and price increases, allowing it to raise its annual forecasts despite an expensive energy market. Year-end sales are expected to reach between €8 billion and €8.5 billion (previously it was €6.2 billion). EBITDA is expected to reach between €1.8 billion and €2.3 billion (previously €1.53 billion).  

• Airbus (AIR.DE) is slashing its forecast for aircraft deliveries this year by 20 planes due to supply chain problems and insufficient components. A week ago, Airbus CEO Guillaume Faury said Airbus had reached the bottom of its logistics problems. 

Analyst’s action:

•  Daimler Truck (DTG.DE) with a recommendation cut to "hold" from HSBC. Target price at €28.

• ProSieben (PSM.DE) with a "hold" recommendation from Deutsche Bank. Target price at €14 (previously €17). ProSieben's shares were downgraded from a "buy" to a "hold" rating by Deutsche Bank due to concerns about the coming recession and advertising revenues. 

The largest percentage changes of companies included in the DAX index. Source: Bloomberg

The most active stocks in the DAX index (DE30). Source: Bloomberg