DE30: DAX at weekly lows ahead of FOMC decision!

• Uncertainty around central bank decisions and LVMH (MC.FR) results wears European markets down

• DAX descends to weekly lows

• Deutsche Bank (DBK.DE) and Puma (PUM.DE) gain after publication of quarterly results

Wednesday's trading session in Europe reverses the bullish trend recorded recently and brings clear declines in the quotations of the main indices. The German DAX is currently losing close to 0.9 per cent and is thus falling to weekly lows. The topic of the day today is, of course, the FOMC decision and, in particular, comments relating to whether the Fed will continue its hike cycle at its September meeting. 

On the other hand, the uncertainty surrounding the FED's decision and tomorrow's ECB decision is being driven further by the publication of LVMH (MC.FR) results. You can read more extensively about the results themselves in our earlier post. 

The mood in Europe during Wednesday's trading session is clearly negative. At the moment, stocks from the luxury goods sector are experiencing the biggest declines, due to the underperformance of LVMH (MC.FR) compared to investors' expectations. Source: xStation 5

German DE30 futures are losing nearly 0.85% during today's session, reaching new weekly lows. Source: xStation 5

News:

RWE (RWE.DE) shares rose as much as 3% after the company increased its revised Ebitda guidance for the full year, helped by higher margins in the gas business and better-than-expected trading profits. The company will report its full H1 results on 10 August. 

ANNUAL FORECAST

• Adjusted Ebitda in the range of €7.1bn to €7.7bn, expected €5.8bn to €6.4bn, estimated €6.55bn (Bloomberg consensus)
• Adjusted net profit €3.30bn to €3.80bn, forecast €2.2bn to €2.7bn, estimate €2.86bn.
• The company confirmed plans to pay a dividend of €1.00 per share for 2023. RWE's preliminary results exceed previous expectations issued by the company. 

Source: xStation 5

At the start of today's session, Deutsche Bank (DBK.DE) presented its Q2 results, with shares currently gaining more than 2%. 

Here are the key details of the results presented:

• Revenue from the FICC business, which fell 10% year-on-year, was better than analysts had expected, and the company continues to anticipate improvement this year.

• Deutsche Bank also set a more positive tone in its overall revenue outlook for the year. Results are expected to settle slightly above the upper end of the range of expectations previously set by the company.

• The bank announced a share buyback of as much as €450 million following ECB approval.

• Deutsche Bank said that credit quality had deteriorated slightly.

Detailed results presented by Deutsche. Source: Bloomberg

Deutsche Bank (DBK.DE) share price chart, D1 interval. Source: xStation 5

Puma (PUM.DE) shares gained 2.9% after the company reported higher-than-expected sales in the second quarter. A recovery in demand in China boosted Puma's business in Asia, where sales rose by around a quarter. Demand was also strong in Europe and Latin America.

Puma reaffirmed its guidance, saying that if momentum continues to grow in the third quarter, it could raise financial targets later this year.

Comments following the results:

• The macroeconomic environment and volatile retail demand continue to be challenging, particularly in North America and Europe, as the risk of recession takes its toll on consumer sentiment. 

• The theme of economic recovery in China post COVID-19 remains uncertain.

• The company continues to expect an improvement in profitability towards the end of the year, mainly driven by sequential improvements in gross profit margins due to lower sourcing and freight costs.

• If business continues to develop 'favourably' in the third quarter of 2023, PUMA could revise its 2023 forecast.

Source: xStation 5

Largest percentage changes in individual companies of the DAX index. Source: Bloomberg

Information from individual companies in the DAX index. Source: Bloomberg