DE40: European equities trend higher, Porsche Shares Tumble on Profit Warning

• European equities trend higher, with W20 leading gains (+1.13%), while Swiss and French markets outperform peers, with SUI20 (+0.41%) and FRA40 (+0.31%) showing strong momentum
• Rheinmetall (RHM.DE) Secures €3.1B Bundeswehr Framework Contract
• Porsche (P911.DE) Shares Tumble on Profit Warning, Strategic Shift

General market situation: European markets are showing a predominantly positive trend, with most indices in green territory. The W20 leads gains (+1.13%), followed by SUI20 (+0.41%) and FRA40 (+0.31%). The NED25 (+0.30%) and ITA40 (+0.16%) also show notable positive movement. The EU50 and UK100 are both up (+0.13%), while DE40 and SPA35 show identical gains (+0.12%). However, some indices are declining, with VSTOXX down (-0.90%) and AUT20 showing a slight decrease (-0.05%). The overall sentiment appears constructive, though the elevated VSTOXX level (16.43) suggests some underlying market caution remains.

Dax Returns by Sector. Source: Bloomberg Financial LP

Volatility is currently observed in the broader European market. Source: xStation

The German DE40 Index is trading at its all-time high (ATH). Bulls will aim to stay above the previous high at 22,000, while bears may target a retest of the 78.6% Fibonacci retracement level. In the event of a more significant correction, the 61.8% Fibonacci retracement level, which coincides with the 30-day SMA, could come into play. The RSI is diverging higher into the overbought zone, which may signal trend continuation. Meanwhile, the MACD is tightening. Source: xStation

Corporate News

• Henkel (HEN.DE) Divests North American Retailer Brands Business - The German consumer goods company has agreed to sell its North American Retailer Brands business to First Quality Enterprises for an undisclosed amount. The divested unit, which generates annual sales of approximately €500 million, specializes in detergents, fabric finishers, and dishwash products. This strategic move aligns with Henkel's previously announced portfolio optimization initiative in its Consumer Brands business from February 2022. The company continues to streamline its operations while maintaining focus on core business segments.
• Rheinmetall (RHM.DE) Secures €3.1B Bundeswehr Framework Contract - The German defense contractor has signed a major framework agreement with the Federal Office for Equipment of the Bundeswehr, running through 2030. The contract includes upgrading 68 existing IdZ-ES platoon systems to digital standards and delivering 24 new platoon systems with extensive peripherals. A firm order worth €417 million gross will be booked in Q1 2025, marking a significant milestone in the Bundeswehr's digitalization efforts.
• Porsche (P911.DE) Shares Tumble on Profit Warning, Strategic Shift - The luxury automaker's stock fell as much as 7.7% to record lows after slashing its 2025 guidance and announcing an €800 million charge related to product portfolio revamp. The company expects 2025 return on sales of 10-12%, well below analyst expectations, citing increased investments in combustion engines and plug-in hybrids. The announcement reflects ongoing challenges in EV transition, particularly in China, and has triggered concerns among analysts. Bernstein called the outlook deterioration a "major concern," while Citi suggests shares could test new lows. The company's market capitalization has halved from its peak of €109.5 billion in May 2023.

Other news coming from individual DAX index companies. Source: Bloomberg Financial LP