Thursday's session in European markets is bringing mixed investor sentiment. US President Trump announced plans to introduce direct tariffs on countries, ranging from 15% to 50%, while also emphasizing that the US is in serious negotiations with the EU and could offer lower tariffs if the EU opens up to American companies. Initial comments from EU officials suggest an agreement between the countries is just days away. Meanwhile, US futures are declining. Notable pre-market moves include a 3% increase in GOOGL and a 6% decline in TSLA. In Europe, investor attention is turning to Deutsche Bank, Nestle, Total Energies, and BASF.
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Volatility currently observed in the broader European market. Source: xStation
The German DE40 index is down 0.23% today, although it remains above the support zones defined by the 50-day exponential moving average (blue line on the chart) and the average defined by Bollinger Bands over a 12-day price history with two standard deviations as the lower and upper supporting lines. As long as the DE40 remains above these zones, the overall uptrend remains stable. Source: xStation
Market News
Morgan Stanley has raised its rating on BASF (BAS.DE) to "overweight," citing a number of upcoming factors, including the potential sale of its Coatings division, which could help reduce debt and stabilize the company's financial situation. Free cash flow is expected to improve due to a decline in capital expenditures, alleviating dividend concerns. Additional factors could include German economic stimulus and easing pressure in China. The target price was raised to €54, reflecting a 20% upside, amid growing market optimism following a recent forecast update, which analysts deemed realistic. The company's shares are up over 2% today.
Deutsche Bank (DBK.DE) shares rose 5% after reporting a strong second-quarter earnings outperformance, with net profit rising to €1.49 billion from a €143 million loss a year earlier—well above analysts' expectations—thanks to solid operating results, cost discipline, and the absence of a major litigation reserve last year. The bank assured that upcoming regulatory changes would not impact its ability to return excess capital to shareholders, boosting investor optimism after the stock had already gained 65% in 2025. Analysts generally welcomed the results, considering them a step toward achieving Deutsche Bank's 2025 targets, although some noted mixed quality in the revenue outperformance and signaled only minor rating upgrades for key business units. A high CET1 ratio supports potential share buybacks later in the year.
The company's shares are currently trading at their highest levels since 2015. Source: xStation
Nestlé (NESN.CH) reported weaker-than-expected sales volumes in the second quarter of 2025, particularly in China and the Health Science segment, causing the stock to decline by as much as 5.1%. Despite organic revenue growth of 2.9% in the first half of 2025, in line with estimates, pricing helped offset volume challenges, with total sales falling 1.8% to CHF 44.23 billion and net profit falling 10.3% to CHF 5.1 billion due to cost pressures and currency fluctuations. Management expects lower margins in the second half of the year, citing continued headwinds related to tariffs and exchange rates, but remains on track with cost-saving targets and strategic reviews of underperforming brands, aiming for long-term growth improvement.
TotalEnergies (TTE.US) shares fell 2.5% after a significant increase in net debt and debt levels in the second quarter of 2025, raising concerns about the sustainability of the company's $2 billion quarterly share repurchase program, despite results meeting expectations. Net debt increased 29% quarter-over-quarter to $25.9 billion, and debt increased to 17.9%, driven by increased spending on acquisitions and working capital. However, the company expects net debt to decline by year-end, supported by strong cash flow generated in the second half of the year. The company reported adjusted net income of $3.6 billion for the quarter, a 23% year-over-year decline due to lower oil and gas prices, but production increased by more than 3% year-over-year. TotalEnergies confirmed a 7.6% dividend increase for the period to €0.85 per share, while continuing its balanced multi-energy strategy, characterized by strong growth in the hydrocarbons and electricity segments.
Other news from individual DAX companies. Source: Bloomberg Financial Lp
