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Stock exchanges from the Old Continent record declines
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DE30 knocks out this year's low!
The last session on the Old Continent this week brings massive declines among the largest stock market benchmarks. The DE30 is losing more than 2% and is trading at its lowest levels in nearly 2 years. The weak sentiment in Europe was weighed down by a PMI reading from Germany, which indicates that a recession is coming.
PMI data:
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Open account Try demo Download mobile app Download mobile appManufacturing: 48.3 (expected: 48.3; previous: 49.1)
Services: 45.4 (expected: 47.2; previous: 47.7)
Certainly nothing good can be said about this data. Of course, we have a reading for industry in line with expectations, but this is the result of rising electricity prices, which will remain high for a long time, and on top of that, it is still unclear whether gas and coal will be enough to last all winter.
The swap market is currently pricing in a near 85% chance of a 75bp rate hike at the ECB's October meeting. Source: Bloomberg
DE30 index chart, D1 interval. The benchmark German blue chips are trading down sharply today and have broken below this year's lows. Source: xStation 5
This week's last session on the German market brings declines in the valuations of most economic sectors. Real estate companies are currently doing the worst. Source: Bloomberg
News:
Shares of Germany's largest battery and rechargeable battery maker Varta (VART.DE) are losing nearly 10% despite no major announcements from the company. The global lithium market is trading down on fears of reduced orders despite still record raw material prices and supply concerns. Varta's share price is already nearly 70% below record valuations.
The leader of the German blue-chip index's gains are again Airbus shares, which are gaining nearly 3% and enjoying a positive outlook from JP Morgan analysts. The shares of Zalando, MTU Aero Engines, Beiersdorf and Symrise are also doing relatively better compared to the other companies in the index.
Deutsche Bank's shares are today giving back some of yesterday's gains despite forecasts of better earnings in an environment of higher rates pushed by the ECB. CEO von Moltke pointed to a deteriorating economic landscape for both households and corporations. Bank stocks are being weighed down by dismal investor sentiment, with the DAX near 2-year lows today.
Mercedes-Daimler today announced a partnership with China's Foton Motor, with which the company will develop and sell heavy-duty vehicles in the Chinese market. China is the largest market for heavy trucks in the world. Daimler also unveiled its first electric truck at the IAA in Hannover. Goldman Sachs maintains an optimistic outlook for the company, with a target price of €37 per share.
The shares of Uniper, the nationalized gas pipeline operator nationalized two days ago, are gaining for another consecutive session. The shares are at nearly 3.5% plus. Due to the energy crisis, the company will keep its British coal mine, Ratcliffe, open. Germany was originally supposed to close the mine by the end of September, but ended up donating $420 million to keep it open.
Bank recommendations:
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Citigroup is lowering its target price for TAG Immobilien (TEG.DE) shares to €15.6 from an earlier price of €29.7.
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JP Morgan lowers its target price for Uniper (UN01.DE) to €2.2 from €4.1.
Changes in the institution's holdings in individual companies of the DAX index (data from the last session). Source: Bloomberg
The largest percentage changes in the companies included in the DAX index. Source: Bloomberg
The most active stocks of the DAX index (DE30). Source: Bloomberg
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