DE40 bulls unfazed by disappointing German data

• European indices trade higher
• German DAX climbs above 17,700 pts
• Earnings reports from MTU Aero Engines, Beiersdorf and Covestro

European stock market indices are trading higher today. German DAX is trading at fresh all-time highs, ignoring disappointing German retail sales data for January released this morning. New record on the German index are being reached on a daily basis. Outlook for the monetary policy, namely expected ECB rate cuts this year, seem to be driving stock market moves. Having said that, release of flash German CPI data for February today at 1:00 pm GMT may be a potential risk event for DE40, given that reports from France and Spain showed higher than expected price growth.

Source: xStation5

Fresh record highs on German DAX futures (DE40) are being reached on a daily basis. The continuing stream of disappointing macro data from Germany is not discouraging market bulls. DE40 reached a textbook target of the upside breakout from the short-term range today and is trading above 17,700 pts mark for the first time in history. As the index is trading in uncharted waters, determining potential resistance levels is becoming increasingly difficult. However, some resistance may appear in the 17,815 pts area, where the 161.8% exterior retracement of the August - October 2023 correction can be found.

Company News

MTU Aero Engines (MTX.DE) reported 13% YoY increase in Q4 revenue to €1.71 billion (exp. €1.67 billion), driven by 15% YoY increase in Commercial Maintenance revenue to €1.12 billion (exp. €1.11 billion). Adjusted EBIT of €221 million was 6.8% YoY higher and also slightly higher than €219.2 million expected. Adjusted EBIT margin for Q4 2023 was reported at 12.9%, marking a deterioration from 13.7% reported a year ago but also coming ahead of median consensus of 12.7%. EPS of €3.96 was above €2.38 expected and above €2.23 reported a year ago.

Beiersdorf (BEI.DE) reported a 7.4% increase in 2023 sales to €9.45 billion (exp. €9.48 billion). Organic sales growth reach 10.8% (exp. 10.3%). Consumer sales increased 9.1% to €7.78 billion (exp. €7.8 billion) while Tesa sales came in flat year-over-year at €1.67 billion (exp. €1.65 billion). Adjusted 2023 EBIT increased 9.5% to €1.27 billion (exp. €1.29 billion), with adjusted EBIT margin improving from 13.2% in 2022 to 13.4% in 2023 (exp. 13.6%). Beiersdorf said that it expects to achieve above-market sales growth in 2024 and also announced up to €500 million in share buybacks.

Beiersdorf (BEI.DE) is the worst performing DAX member today. Stock launched today's trading with a big bearish price gap, following release of disappointing 2023 results. Price dropped to the lowest level since early-December 2023, but bulls managed to recover part of losses and push the stock back above €132.50 price zone. Source: xStation5

Covestro (1COV.DE) reported a net loss of €187 million for Q4 2023 (exp. -€98.5 million) and a positive EBITDA of €132 million (exp. €98.6 million). Q4 sales reached €3.35 billion (exp. €3.44 billion), while free operating cashflow declined 87% YoY to €73 million. Covestro expects Q1 EBITDA of €180-280 million (exp. €244 million) as well as a full-year EBITDA of €1.00-1.60 billion (exp. €1.35 billion). Full-year sales are seen at €14-18 billion.

According to Handelsblatt report, ThyssenKrupp (TKA.DE) may reduce total number of staff at its steel subsidiary to 27,000. This would mean cutting around 5,000 jobs. Apart from that, report says that the company is also planning to outsource security services and logistics.

Siemens Energy (ENR.DE) is the best performing DAX member today after the company obtained €4 billion in revolving credit facility to integrate Siemens Games debt.

Siemens Energy (ENR.DE) caught a bid on news of €4 billion credit facility. Stock jumped above the 200-session moving average and is now testing resistance zone ranging around €14.50 mark. However, it should be noted that similar break and test occurred yesterday, but bulls failed to hold onto those gains until the end of trading day. Source: xStation5