DE40: European stocks gain ahead of Big Tech earnings 💡

• Tuesday's session brings moderate gains in European trading
• Heidelberg Materials struggles with weak demand in Europe and Asia
• Covestro narrows forecasts for this year

Overall market situation:

Tuesday's session on European stock markets brings a further attempt to calm the mood after the relatively turbulent movements seen last week. Germany's DAX is currently gaining 0.35% on an intraday basis. At the same time, France's CAC40 is adding 0.39%. Investors are focusing today on CPI data from Germany and results from Wall Street giants, including Microsoft and AMD. 

CPI data from the Länder suggest that inflationary pressures in Germany may pan out slightly below expectations. Source: xStation 

Volatility currently seen in the broad European market. Source: xStation 

Germany's benchmark DE40 is trading nearly 0.25% higher during Tuesday's session. The index keeps trying to stay above the key support level set by the 100-day EMA (purple curve on the chart). Breaking through the bottom of this zone and closing the intraday candle below could open the way to deeper declines marked by the abolition of the 23.6% Fibo of the downward channel set by the upward impulse initiated in October 2023. The main resistance level remains the historical peak at 19,000 points. Source: xStation

News: 

Heidelberg Materials (HEI.DE) shares are down 2% after the German building materials maker's second-quarter results showed weak demand in Europe and Asia.

SECOND QUARTER RESULTS

• Revenues €5.51 billion, -1.3% y/y, estimated €5.54 billion 
• Revenues in Europe €2.54 billion, -2.3% y/y, estimated €2.29 billion
• Revenues in North America €1.43 billion, +1.5% y/y, estimated €1.44 billion
• Revenues in Asia-Pacific €851 million, -2.6% y/y, estimated €857.8 million
• Revenues from Africa, Mediterranean and West Asia €545 million, -7.6% y/y, estimated €519.6 million

RESULTS FOR THE FIRST HALF OF THE YEAR 

• Profit €574 million, -20% y/y
• Revenue €9.99 billion, -4.6% y/y

ANNUAL FORECAST

• Company still forecast profit from current operations of €3 billion to €3.3 billion, estimated €3.12 billion

Covestro (1COV.DE) shares are gaining nearly 1% in today's trading session, despite the company narrowing its earnings forecast for the full year. 

ANNUAL FORECAST

• EBITDA is expected to be between €1 billion and €1.4 billion, previously estimated at €1 billion to €1.6 billion, analysts estimated €1.24 billion
• Free cash flow from operations is expected to be negative €100 billion to +€100 billion, analysts expected +€218.1 million

FORECAST FOR THE THIRD QUARTER

• EBITDA is expected to be between €250 million and €350 million, analysts estimated €359.7 million

SECOND QUARTER RESULTS

• EBITDA up from €320 million, -17% y/y, estimated €311.8 million
• EBIT €81.0 million, estimated €92.2 million
• Net loss €72.0 million, estimated loss €1.56 million
• Sales €3.69 billion, -0.8% y/y, estimated €3.73 billion

Other news coming out of individual companies in the DAX index. Source: Bloomberg Financial LP