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DE30 mixed ahead of FOMC decision
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GfK sentiment worsens!
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Mercedes-Benz (MBG.DE) and Deutsche Bank (DBK.DE) update forecasts for 2022
Market sentiment during today's trading session on European trading floors is mixed. Germany's DE30 gains 0.29%, France's FRA40 gains 0.25%, and Poland's W20 loses 1.08%.
Investors' attention today is focused on the FOMC's decision on an interest rate hike and the further path of tightening. Markets expect a 75 basis point rate hike. Investors will focus on Powell's comments on the economy and the future path of rates. In Germany, sentiment deteriorated due to a weak GfK consumer confidence reading, which fell to -30.6 against the last reading of -27.7 and forecasts of -29.
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DE30 index chart, H4 interval. The situation on the Dax has not changed much since the last analysis. The blue-chip benchmark is recording gains today, however, it is uniformly holding 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:
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Today began the wage strike of Lufthansa (LHA.DE) employees announced yesterday. Ver.di unions are demanding a 9.5% wage increase, or at least 350 euros for nearly 20,000 employees. Most flights from Munich and Frankfurt have been suspended. In Frankfurt, the company will cancel nearly 678 flights. As Michael Niggemann, a member of Lufthansa's board of directors, has communicated, the current wage strikes are causing great damage. The delays and cancellations are scheduled to end by 5 a.m. BST tomorrow.
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Mercedes-Benz (MBG.DE) has raised its business expectations for 2022 (thanks to rising car prices and the implementation of more profitable business solutions) despite inflation and supply chain issues. The carmaker forecasts a return on sales of 12% to 14% vs. the 11.5%-13% it recently assumed. In the second quarter, the company posted a 7% increase in sales revenue (to 36.4 billion euros) and a 7% decline in the number of cars sold (to 487,100 units). Adjusted EBIT for Q2 rose 8% to €4.9 billion. EPS was €2.91 compared to last year's €2.84. Net income rose 2% to €3.198 billion.
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Deutsche Bank's (DBK.DE) results surprised the market. Despite peripheral market problems, the bank's Q2 2022 revenue reached €6.6 billion, up 7% from the Q2 2021 result. Net profit was €1.05 billion (+51% y/y)
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Despite the strong financial performance, Deutsche Bank warns of costs in the face of galloping inflation. The bank also abandoned its cost target and warned that its core profitability target is becoming increasingly difficult to achieve due to recessionary fears, the war in Ukraine and litigation that are driving up expenses. The mixed outlook for the future has triggered declines in the bank's stock price, which is currently trading nearly 3% below the dash.Source: Bloomberg
Analyst's action:
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Mercedes-Benz (MBG.DE) with a "buy" recommendation from JP Morgan. Target price at €90.
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Deutsche Bank (DBK.DE) with a "buy" recommendation from JP Morgan. Target price at €13.
The largest percentage changes of companies included in the DAX index. Source: Bloomberg
The most active stocks in the DAX index (DE30). Source: Bloomberg
