FINWIRES · TerminalLIVE
FINWIRES

Blue-chip DAX Index Slips; German Monthly Factory Orders Decline

By

German shares ended Monday in the red, with the blue-chip DAX index losing 0.58%, as the market reacted to updates regarding renewed escalations between Israel and Iran and the latest local manufacturing data.

The conflict flared over the weekend after Israel and Iran exchanged strikes overnight, though losses were partly limited after Iran later said it had concluded its current military operations against Israel and US President Donald Trump demanded both countries immediately stop firing.

On the economic front, Germany's new manufacturing orders fell 3.8% month over month in April, compared with the revised 4.5% gain in the previous month and the expected 2.2% drop, according to Investing.com data. Annually, factory orders rose 1.6%, against the revised 6.1% jump earlier.

Destatis attributed the negative development to a "substantial decline" in automotive industry and electrical equipment orders, alongside fewer factory orders in the machinery and equipment segments.

"German factory orders fell by 3.8% m/m, with core orders down by the same amount, broadly in line with our expectations. But the drop followed on a large gain in March. Orders remained above pre-war levels," Oxford Economics said. "Today's figures confirm our expectations that the German economy and industry in general are faring relatively better than feared, thanks to a precautionary inventory buildup and some noncyclical support factors."

In corporate news, Porsche Automobil Holding (PAH3.F), d/b/a Porsche SE, was one of the top stocks, rising 1.28%, after BofA Global Research reiterated its buy rating on the stock, citing the holding company's widening discount to its stake in Volkswagen (VOW.F).

"Porsche SE (PSE) shares are down -23% y-t-d, reflecting the decline in its core holding VW, in which PSE owns a 53.1% stake, with VW down c17%; furthermore, PSE's holding discount has widened from 28% at the beginning of the year to 37%, vs a 12m avg. of 30%," BoFA noted, adding that by buying Porsche SE, investors buy a basket of Volkswagen and Porsche AG (P911.F) at an "attractive 37% discount." Volkswagen and Porsche AG were up by 0.06% and 2.30%, respectively, at the end of the trading day.

Meanwhile, Henkel (HEN.F, HEN3.F) partnered with Canadian solar technology company Brilliant Matters to develop screen-printable silver inks for large-scale organic photovoltaic panel production. The German chemical and consumer goods group was down 0.72% at closing.

Related Articles

Asia Markets

Saudi Equities Start Week Lower As Middle Eastern Conflict Continues

Saudi Exchange-traded shares closed lower on Sunday as the new geopolitical developments in the Middle East pushed the Tadawul All Share Index 0.56% in the red.The US is looking into using Iran's assets to repair the damage caused by the Middle Eastern country to its Gulf neighbors. US Treasury Secretary Scott Bessent's statement after it was disclosed that having its assets unfrozen is a requirement for its peace deal with the US.Meanwhile, the members of OPEC+, which includes the Organization of the Petroleum Exporting Countries and allies such as Russia, will reportedly increase their oil output targets by 188,000 barrels per day in July, the same as the prior month.Back at home and on the corporate front, Aldawaa Medical Services (SASE:4163) ticked down 2.55% at closing as it reported a 78.84% year-over-year drop in attributable net profit and a 7.18% annual decline in its revenue for the first quarter ended March 31."Net profit for the first quarter of 2026 decreased by SAR 83 million, or 78.8%, compared to the same period of the last year, primarily driven by the corresponding decline in revenue and gross profit, while maintaining a broadly stable gross margin of 35.6%. The decline is also contributed by higher operating expenses and non-recurring items during the period as below," the medical services company said in its report.Looking ahead into the week, the local economic calendar will see the release of the kingdom's final GDP growth rate numbers for the first quarter on Tuesday, and the April industrial production data on Wednesday.

$^TASI$SASE:4163
Asia Markets

US Equity Indexes Plummet as Dwindling Expectations for Monetary Policy Easing Decimate Mega-Cap Technology

US equity indexes plunged amid a slide in mega-cap chip names and government bonds, as a strong jobs report slashed the odds for monetary policy easing this year.The Nasdaq Composite nosedived 4.2% to 25,709.43, with the S&P 500 down 2.6% to 7,383.74, and the Dow Jones Industrial Average lower by 1.4% to 50,866.78 on Friday.Technology sank with consumer discretionary, materials, and communication services. Consumer staples led the gainers.In a third straight month of growth, nonfarm payrolls surged by 172,000 in May, above the 88,000 jobs increase expected in a Bloomberg-compiled survey. April was revised upwards to a 179,000 increase, and March payrolls were revised upwards to a 214,000 increase, the Bureau of Labor Statistics said Friday. The net upward revision came in at 93,000 jobs, bringing the 3-month average of payroll increases to 188,000, the strongest pace since March 2024, according to notes from Morgan Stanley and Stifel."We read this employment report as indicating the Fed can and will remove its easing bias in June," a Morgan Stanley research note said. "Perhaps exaggerated by a surge in state gov't payrolls and in leisure, but unquestionably strong labor demand."The unemployment rate remained at 4.3% in May, per the BLS data, as expected. Hourly earnings rose by 0.3%, as expected, and faster than a 0.2% increase in April."We see the next move as a hike with our baseline timing being in 1Q27," said David Doyle, head of economics at Macquarie. "Risks to this have become skewed to an earlier hiking with markets now discounting a hike in 4Q26."The probability of a 25 basis-point increase in interest rates in December surged to 43%, from 36% a week ago, according to the CME FedWatch tool. The comparisons for September were 34% versus 20%, and, for October, the data showed an increase to 40% from 25%.US Treasury yields soared, with the 10-year up 6.1 basis points to 4.54% and the two-year higher by 10.6 basis points to 4.16%.In precious metals, gold futures dropped 3.3% to $4,356.8, and silver futures slumped 7% to $68.84.A potential peace deal between the US and Iran hinges on US President Donald Trump's administration agreeing to release $24 billion in frozen Iranian assets, Mohsen Rezaei, military adviser to Supreme Leader Ayatollah Mojtaba Khamenei, told CNN from Tehran, warning that the US would "enter into a dark corridor" should it resume fighting."The negotiations are at a deadlock and Trump must break this deadlock," Rezaei was cited as saying. "The ball is in Trump's court."West Texas Intermediate crude oil futures declined 2.4% to $90.62, and Brent crude futures fell 1.9% to $93.18.In company news, Lululemon Athletica (LULU) shares slumped 9.2%, among the worst performers on the S&P 500, after the company reported a decline in fiscal Q1 earnings and cut its 2026 guidance.Among the top gainers on the index was Cooper Companies (COO), up 7.1%, after the firm reported stronger-than-expected growth in fiscal Q2 adjusted earnings and sales, and lifted its fiscal 2026 outlook for non-GAAP diluted earnings per share.

$^DJI$^IXIC$^SPX$COO$LULU
Asia Markets

US Equity Indexes Slump This Week as Fed Rate Increase Expectations Sink Big Tech, Iran Demands Frozen Assets

US equity indexes dropped this week as big tech tumbled after strong jobs data boosted the odds for monetary policy tightening, while Iran linked the release of billions of dollars of frozen assets to a peace deal with Washington.* The S&P 500 closed at 7,383.59 on Friday versus 7,580.06 a week ago. The Nasdaq Composite stood at about 25,709.43, compared with 26,972.62 a week earlier. The Dow Jones Industrial Average ended at 50,866.78, versus 51,032.46 at the end of last week.* Consumer cyclical, communication services, and technology were among the worst five sectors this week. Amazon.com (AMZN), Tesla (TSLA), and Microsoft (MSFT) were among the bottom 10 companies with a market capitalization of more than $200 billion this week, according to data compiled by Finviz.* Nonfarm payrolls rose by 172,000 in May, above the 88,000 jobs increase expected in a Bloomberg-compiled survey, while April payrolls were revised upwards to a 179,000 increase and March payrolls were revised higher to a 214,000 gain, for a net upward revision of 93,000 jobs.* US job openings rose to 7.618 million in April, above the 6.866 million consensus.* The probability of a 25 basis-point increase in interest rates in December surged to 43%, from 36% a week ago, according to the CME FedWatch tool. The comparisons for September were 34% versus 20%, and, for October, the data showed an increase to 40% from 25%.* A potential peace deal between the US and Iran hinges on US President Donald Trump's administration agreeing to release $24 billion in frozen Iranian assets, Mohsen Rezaei, military adviser to Supreme Leader Ayatollah Mojtaba Khamenei, told CNN from Tehran, warning that the US would "enter into a dark corridor" should it resume fighting.* "The negotiations are at a deadlock, and Trump must break this deadlock," Rezaei was cited as saying in the news report.

$^DJI$^IXIC$^SPX$AMZN$MSFT$TSLA