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DAX Index Starts Week Lower; German Consumer Sentiment Weakens Further

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-- German equities kicked off the new trading week lower, with the blue-chip DAX index down 0.19% on Monday's close, as markets await interest rate decisions from major central banks due within the week.

The US Federal Reserve is set to announce its latest monetary policy move on Wednesday, while the decisions from the European Central Bank and the Bank of England are due Thursday.

At home, German consumer sentiment appears to have deteriorated further, with the GfK consumer climate indicator for May 2026 dropping to -33.3 points from the revised -28.1 points a month ago, weighed down by falling income and economic expectations. The reading marks the indicator's lowest level since February 2023 and stands below the Investing.com consensus estimate of -30.2 points.

"The inflation rate in Germany rose from 1.9 percent to 2.7 percent in March due to rising energy prices caused by the war in Iran, leading the majority of consumers to once again expect price increases. Although the indicator for price expectations rose somewhat less sharply in April than in March- likely due to falling prices at the filling stations, the indicator's level has risen compared to the beginning of the year," the NIM Consumer Climate powered by GfK survey said.

Meanwhile, the export outlook in Germany slightly improved as positive expectations roughly offset negative ones amid a high level of geopolitical uncertainty. The ifo Institute's export expectations indicator increased to 0.1 points in April from the previous month's -0.7 points.

In corporate news, German officials held informal preliminary talks with European banks to explore the possibility of a new strategic investor purchasing a stake or taking over Commerzbank (CBK.F), unnamed sources reportedly told Bloomberg News. The German government, which holds a 12% stake in Commerzbank, is said to be looking at alternatives to a potential takeover by Italian lender UniCredit, which submitted its offer earlier in 2026. Commerzbank's shares were up 2.39% at closing.

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US Markets

United Airlines CEO Confirms Approach to American Regarding Potential Merger

United Airlines (UAL) Chief Executive Scott Kirby confirmed Monday that he approached fellow carrier American Airlines (AAL) about a possible merger, but the latter declined to engage and closed the door on a deal.A potential combination between the two companies could have expanded service to "smaller communities," increased the total number of economy seats in the marketplace, offered affordable prices to customers and built a more globally competitive US airline, Kirby said in a statement. The merger could have boosted the US economy and created "millions of jobs," among other benefits, Kirby added."I was hoping to pitch that story to American, but they declined to engage and instead responded by publicly closing the door," Kirby said. "Without a willing partner, something this big simply can't get done."American Airlines didn't immediately respond to' request for comment.American Airlines shares were down 2.7% in Monday afternoon trade, while United Airlines fell 1.4%.Earlier this month, American Airlines said it wasn't interested in any talks regarding a merger with United Airlines, adding that it would be "negative for competition and for consumers." Any deal would also have been "inconsistent" with the Trump administration's philosophy towards the industry and antitrust law, the company said at the time.During an earnings conference call with analysts last week, American Airlines CEO Robert Isom said a potential combination with United Airlines would have been "anticompetitive.""Everybody that has weighed in suggests the same thing," Isom told analysts, according to a FactSet transcript. "Bad for customers, bad for the industry, and then ultimately -- that'd be bad for American Airlines."American Airlines' public comments "make it clear that a merger like this is off the table for the foreseeable future," Kirby said Monday.US President Donald Trump reportedly voiced his opposition to the combination in a recent interview with CNBC, saying he didn't "like" having the two airlines merge.Last week, American Airlines reported that its first-quarter adjusted per-share loss narrowed year over year, while operating revenue increased. The carrier cut its 2026 earnings outlook at the time. Separately, United Airlines reported better-than-expected first-quarter results, but lowered its full-year earnings outlook amid rising fuel costs.Price: $91.69, Change: $-1.31, Percent Change: -1.41%

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Sectors

Sector Update: Health Care Stocks Softer in Afternoon Trading

Health care stocks were lower Monday afternoon with the NYSE Health Care Index easing 0.1% and the State Street Health Care Select Sector SPDR ETF (XLV) decreasing 0.2%.The iShares Biotechnology ETF (IBB) shed 0.2%.In corporate news, Eli Lilly (LLY) said Monday it has agreed to acquire Ajax Therapeutics for up to $2.3 billion in cash. The deal includes an upfront payment and subsequent payouts based on the achievement of clinical and regulatory milestones, the company said. Lilly shares were down 0.5%.Organon (OGN) shares jumped 17% after the company agreed to be acquired by India's Sun Pharmaceutical Industries $14 a share in cash, valuing the company at $11.75 billion.Moderna (MRNA) is facing a patent infringement lawsuit from CureVac, which alleged that Moderna's COVID-19 vaccine Spikevax used its proprietary mRNA technology without authorization, Reuters reported Saturday. Moderna shares were falling 3.3%.Catalyst Pharmaceuticals (CPRX) is being considered as a potential acquisition by Italy's Angelini Pharma, Bloomberg reported. Catalyst shares rose past 6%.

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Sectors

Sector Update: Consumer Stocks Decline Monday Afternoon

Consumer stocks were lower Monday afternoon, with the State Street Consumer Staples Select Sector SPDR ETF (XLP) decreasing 0.8% and the State Street Consumer Discretionary Select Sector SPDR ETF (XLY) shedding 0.3%.In corporate news, Domino's Pizza (DPZ) reported weaker-than-expected Q1 results on Monday, with the company's CEO saying consumer uncertainty and inflation weighed on demand late in the quarter. Its shares slumped past 9%.Verizon Communications (VZ) lifted its full-year earnings outlook on Monday and reported a Q1 bottom line above market estimates, while it unexpectedly added postpaid phone subscribers in the three-month period. Its shares rose 2.5%.Toyota Motor (TM) reported Monday total worldwide sales of 897,871 vehicles in March, down 7.3% from a year earlier. Toyota shares were fractionally higher.

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