FINWIRES · TerminalLIVE
FINWIRES

Blue-chip DAX Index Rises; German Private Sector Contraction Slows

By

German shares ended the last trading day of the week in the green, as the market assessed the latest private sector data.

At Friday's close, the blue-chip DAX index was up 0.78%.

Business survey data compiled by S&P Global showed an easing contraction in Germany's private sector, with manufacturing gains overshadowed by a persistent, albeit moderating, downturn in service sector activity. The final S&P Global Germany Composite PMI Output Index stood at 49.5 in June, up from the previous 48.8 and the flash estimate of 48.

"Encouragingly, cost pressures subsided considerably across the service sector in June, helped by the reduced price of fuel. However, the dynamics for the coming months are somewhat unclear, as whilst global oil prices have fallen closer to pre-conflict levels, the temporary fuel tax cut has now ended and developments in the Middle East remain unpredictable," S&P Global Market Intelligence economics associate director Phil Smith said.

Zooming out, the final seasonally adjusted S&P Global Eurozone Composite PMI Output Index hit a three-month high of 50 in June, against the 48.5 previously and the flash estimate of 49.5, marking the index's return to expansion territory. The euro area's private sector stabilized for the month, as an expansion in manufacturing output offset a slowing decline in services activity.

In corporate updates, Deutsche Bank Research cut its price target for Rheinmetall's (RHM.F) buy-rated stock to 1,800 euros from 2,100 euros ahead of the German arms maker's second-quarter earnings report on Aug. 6.

"After the [Federal Ministry of Defence] scrapped the F126 program, the focus of the quarter will no longer be on reaching the EUR20bn order indication the company had initially given but clearly on delivering the guided Q2 top-line growth. In an ad hoc release before the pre-close call, the company confirmed the Q2-26 top-line message, which is a positive and in line with our thinking. On the other hand, unsurprisingly, the company points to a shortfall versus the EUR20bn order intake guide. Furthermore, Rheinmetall quantified the F126 financial fallout with a surprising FY26 impact," the research firm wrote, noting it maintained a "positive view" on the stock. Rheinmetall lost 1.94% at the end of the session.

Fellow defense company Renk Group (R3NK.F) fell 0.98% after agreeing to buy UK-based high-precision gearbox manufacturer David Brown Defence through a purchase of shares in DB Defence Holdco. The military and civilian propulsion systems maker expects the deal will bolster its naval defense business.

Related Articles

Asia Markets

Update: US Equity Indexes Mixed as Weak Jobs Data Trigger Rotation Out of Growth Stocks

(Updates with index/price moves, macroeconomic data, and company news from the first paragraph.)US equity indexes traded mixed as the economy added the fewest jobs since February, triggering a rotation out of high-growth and into defensives and old-economy sectors.The Nasdaq Composite dropped 0.8% to 25,832.67, while the S&P 500 was unchanged at 7,483.24 on Thursday, the last trading day of the week, on account of the Independence Day public holiday on Friday. The Dow Jones Industrial Average remained 1.1% higher at 52,900.07 after hitting a new all-time peak earlier in the session.Communication services, technology, and consumer discretionary were the sole decliners. Healthcare, consumer staples, and utilities led the gainers.The June employment report showed nonfarm payrolls rose by 57,000, according to the Bureau of Labor Statistics, below the 113,000 increase expected in a Bloomberg-compiled survey. May payrolls were revised downward to a 129,000 gain, and April payrolls were revised down to a 148,000 expansion, for a net downward revision of 74,000 jobs.Hourly earnings increased by 0.35%, compared with the 0.3% gain expected, and following a 0.27% gain in May. Hourly earnings were up 3.5% year-over-year.Meanwhile, Atlanta Federal Reserve's gross domestic product 'Nowcast' estimate came in at 1.2% growth in Q2, versus the previous 2.5% forecast.US initial jobless claims fell to 215,000 in the week ended June 27 from an upwardly revised 216,000 level in the previous week, compared with expectations for an increase to 218,000 in a survey of analysts compiled by Bloomberg.US Treasury yields were mixed, with shorter maturities declining and mid- to long-term maturities rising. The two-year fell 2.7 basis points to 4.14% while the 10-year yield rose one basis point to 4.49%.In geopolitical news, the Doha discussions between the US and Iran produced "positive progress" on issues related to the memorandum that halted the war in June and were "building on the outcomes" from the Switzerland summit, a Qatar Foreign Ministry spokesperson said in a post on X, formerly Twitter, according to Reuters.Negotiators spent two days discussing maritime traffic in the Strait of Hormuz and unfreezing Iran's funds, two critical issues under the initial deal, sources familiar with the discussions told Reuters. Iran issued a fresh warning for vessels to follow Tehran-designated routes through the Strait of Hormuz, CNN reported Thursday.The front-month global oil benchmark North Sea Brent was little changed at $71.58 per barrel, while the US West Texas Intermediate slipped 0.2% to $68.48 per barrel.In company news, Tesla's (TSLA) shares slumped 8.2% even as the company's Q2 deliveries beat market expectations, while Truist Securities said the electric vehicle maker failed to provide any updates on key topics.Apple (AAPL) plans to launch five new iPhone models to gain market share despite a memory shortage that is driving up prices, Nikkei Asia reported Thursday, citing sources familiar with the matter. Shares jumped 4.8%, the Dow's top gainer.

Dow JonesNasdaq CompositeS&P 500$AAPL$TSLA
Asia Markets

US Equity Indexes Rise This Week as Mag-7 Gains Help Offset Chipmakers-Led Decline in Technology

US equity indexes rose this week as gains in communication services and consumer cyclicals helped offset declines in technology, and crude oil extended declines amid continuing progress in Iran peace talks.* The S&P 500 closed at 7,483.24 on Friday versus 7,354.02 a week ago. The Nasdaq Composite stood at about 25,832.67, compared with 25,297.62 a week earlier. The Dow Jones Industrial Average ended at 52,900.07, versus 51,876.11 at the end of last week.* Health care, communication services, and consumer cyclicals led sectors, while energy, utilities, and technology lagged. Within tech, chipmakers retreated, and Micron Technology was among the steepest decliners.* All but one Magnificent-7 firm ended the week higher, with Nvidia (NVDA) being the exception. Of the remaining six, four were in the top 10 of companies with a market capitalization of over $200 billion each. Apple (AAPL) led the Mag-7 pack, with a weekly gain of 12%.* The Doha discussions produced "positive progress" on issues related to the memorandum that halted the war in June and were "building on the outcomes" from the Switzerland summit, a Qatar Foreign Ministry spokesperson said, according to a Thursday report from Reuters. Negotiators discussed maritime traffic in the Strait of Hormuz and unfreezing Iran's funds, sources familiar with the discussions told Reuters.* US West Texas Intermediate crude oil retreated 0.2% to $68.46 per barrel late Thursday, trading below levels seen at the start of the Iran war.* The June employment report showed nonfarm payrolls rose by 57,000, according to the Bureau of Labor Statistics, below the 113,000 jump expected in a Bloomberg-compiled survey. May payrolls were revised downward to a 129,000 gain, and April payrolls were revised down to a 148,000 expansion, for a net downward revision of 74,000 jobs.* Price risks have fallen in recent weeks, Federal Reserve Chair Kevin Warsh said, while reiterating his determination to ease inflation to the 2% target.

Dow JonesNasdaq CompositeS&P 500
Asia Markets

Update: US Equity Indexes Mixed Following Weakest Jobs Report in Four Months

(Updates with index/price moves, macroeconomic data, and company/geopolitical news from the first paragraph.)US equity indexes traded mixed as the economy added the fewest jobs since February, triggering a rotation out of high-growth sectors and into defensives.The Nasdaq Composite dropped 1.4% to 25,681.1, and the S&P 500 declined 0.6% to 7,441.9 after midday Thursday. The Dow Jones Industrial Average bucked the trend, remaining 0.6% higher at 52,752.5 after hitting a new all-time peak earlier in the session.Communication services, technology, and consumer discretionary were the steepest decliners. Healthcare, consumer staples, and utilities led the gainers.The June employment report showed nonfarm payrolls rose by 57,000, according to the Bureau of Labor Statistics, below the 113,000 jump expected in a Bloomberg-compiled survey. May payrolls were revised downward to a 129,000 gain, and April payrolls were revised down to a 148,000 expansion, for a net downward revision of 74,000 jobs.Hourly earnings increased by 0.35%, compared with the 0.3% gain expected, and following a 0.27% gain in May. Hourly earnings were up 3.5% year-over-year.Meanwhile, Atlanta Federal Reserve's gross domestic product 'Nowcast' estimate came in at 1.2% growth in Q2, versus the previous 2.5% forecast.The probability of the Federal Reserve staying on a policy hold in September jumped to 46% on Thursday afternoon from 36% a day ago, according to the CME FedWatch tool. The likelihood that the Fed pause will extend into October and December also increased.Most US Treasury yields fell, with the two-year down 3.5 basis points to 4.13%."The US job market stumbled in June and wasn't quite as solid as previously believed over the prior two months," Derek Holt, head of capital markets economics at Scotiabank, said in a note. "The result drove down shorter-term US Treasury yields and reduced OIS contract pricing for hikes, with the September contract now down 10bps from the full hike pricing back on September 22nd."Gold futures advanced 1.2%% to $4,129.7, and silver futures jumped 1.4% to $61.37.In geopolitical news, the Doha discussions between the US and Iran produced "positive progress" on issues related to the memorandum that halted the war in June and were "building on the outcomes" from the Switzerland summit, a Qatar Foreign Ministry spokesperson said in a post on X, formerly Twitter, according to Reuters.Negotiators spent two days discussing maritime traffic in the Strait of Hormuz and unfreezing Iran's funds, two critical issues under the initial deal, sources familiar with the discussions told Reuters. Iran issued a fresh warning for vessels to follow Tehran-designated routes through the Strait of Hormuz, CNN reported Thursday.The front-month global benchmark North Sea Brent declined 0.6% to $71.17 per barrel, and the US West Texas Intermediate fell 0.6% to $68.16 per barrel.In company news, Tesla's (TSLA) shares slumped 7.8% even as the company's Q2 deliveries beat market expectations, while Truist Securities said the electric vehicle maker failed to provide any updates on key topics.Apple (AAPL) plans to launch five new iPhone models to gain market share despite a memory shortage that is driving up prices, Nikkei Asia reported Thursday, citing sources familiar with the matter. Shares jumped 4.7%, the Dow's top gainer.

Dow JonesNasdaq CompositeS&P 500$AAPL$TSLA