- European stock markets showing strong positive momentum today with 10 of 11 major indices in the green, led by ITA40 (+0.55%) and SUI20 (+0.53%), while only NED25 declines (-0.09%)
- DE40 advancing 0.41% to 22,452.2 points despite recent data showing Germany’s economy contracted for the fourth consecutive quarter, with Q4 2024 GDP falling 0.2% year-on-year
- Heidelberg Materials shares under pressure (-5.4%) despite beating earnings estimates, with investors disappointed by lack of share buyback increase announcement
- Market volatility remains subdued with VSTOXX up marginally (+0.28%) at 17.73 points, suggesting investors remain confident despite Germany’s ongoing manufacturing slump
European markets are predominantly positive today, with only NED25 showing a decline (-0.09%). All other indices are in positive territory, with Italian markets leading the gains as ITA40 rises 0.55%. The gains follow a progressive pattern with W20 (+0.23%), AUT20 (+0.32%), EU50 (+0.35%), SPA35 (+0.37%), FRA40 (+0.38%), DE40 (+0.41%), UK100 (+0.42%), and SUI20 (+0.53%) all showing upward momentum. The German DAX (DE40) is trading at 22,452.2 points, while the French CAC 40 (FRA40) stands at 8,100.7.
Dax Returns by Sector. Source: Bloomberg Financial LP
Volatility is currently observed in the broader European market. Source: xStation
The German DE40 Index is attempting to regain bullish momentum after retesting the 78.6% Fibonacci retracement level. Bulls will aim to recapture the ATH at 22,996, while bears will look for a move below the 78.6% Fibonacci retracement level and a test of the 30-day SMA at 21,864. The RSI is in bearish divergence, which could be broken if the current high surpasses the previous low. The MACD is starting to tighten after a bearish crossover. Source: xStation
News
- Germany Records Fourth Consecutive Quarter of Economic Contraction – Germany’s economy contracted by 0.2% year-on-year in Q4 2024, according to Destatis figures released Tuesday. The manufacturing sector fell 0.6%, marking its seventh consecutive quarterly decline. Exports dropped 2.2% compared to the previous quarter, while imports increased by 0.5%. This follows GDP contractions of 0.3% in Q3, 0% in Q2, and -0.2% in Q1, raising concerns about structural challenges facing Europe’s largest economy.
- Heidelberg Materials Shares Fall Despite Solid Results – Shares dropped despite better-than-expected 2024 results, with operating EBITDA up 5.7% to €4.50 billion and revenue of €21.16 billion. For 2025, the company forecasts profit from operations between €3.25 billion and €3.55 billion. Jefferies analysts note some investors were disappointed by the absence of an increased share buyback program, with the second tranche scheduled to start in Q2 2025. Management expects construction demand to stabilize at low levels with continued volatility in energy and raw materials markets.
- Fresenius Medical Care Raises 2025 Outlook as Dialysis Market Recovers – The company now expects operating income to grow by high-teens to high-twenties percentage in 2025, with margins of 11-12%, up from previous estimates of 10-14%. FMC has raised its three-year savings target to €750 million from €650 million, having already achieved €567 million. CEO Helen Giza’s restructuring included reducing workforce by 8,200 employees and divesting 230 facilities in 2024. US patient volumes continue to recover, with Barclays noting the outlook is “more constructive” than competitor DaVita’s recent guidance.
- PBB Deutsche Pfandbriefbank Announces New CRO – Jörn Joseph will join the management board as Chief Risk Officer on June 1, succeeding Andreas Schenk who will leave by mutual agreement. Joseph comes from Deutsche Bank, where he served as CRO of the Private Clients Bank Germany division.
Other news coming from individual DAX index companies. Source: Bloomberg Financial LP
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