Germany

Hannover Rück is positioned for growth, with strong demand in reinsurance and an expected full-year net income target of €2.1 billion. The company’s strategic use of retrocession and insurance-linked securities (ILS) aids in expanding capacity. Continental shows improved profitability with a projected adjusted EBIT margin of 8.9%, despite a sales decline. Strong cost management and price adjustments helped drive earnings, particularly in the Automotive and Tires sectors.

The dismissal of Finance Minister Christian Lindner by Chancellor Olaf Scholz has led to the collapse of Germany’s ‘traffic light’ coalition, sparking political and economic uncertainty. Lindner’s FDP exit comes just two weeks before the critical 2025 budget vote, with key policy disagreements on climate and economic reform proving too divisive.

On November 6, both Siemens Healthineers and BMW will release their Q3 2024 earnings, providing insights into two key German sectors. Siemens Healthineers (SHL): Expected EPS: €0.65 (up from €0.52 last quarter) Expected Revenue: €6.33 billion (up from €5.42 billion in Q2) BMW (BMW.DE): Expected EPS: €1.37 (down 67.38% YoY) Expected Revenue: €33.54 billion (down from €38.46 billion last year)

The Federal Fiscal Court (Bundesfinanzhof, BFH) considers the €20,000 limit for offsetting losses on forward transactions to be unconstitutional. The Annual Tax Act 2024 plans to abolish it retroactively.

The DAX is still in a dynamic uptrend and reached new highs on 17 October. Since then, a slight consolidation has been taking place in the range between the EMA 20 and the all-time high in order to reduce the overbought market situation.

The German economy remains mired in a prolonged period of weakness that began in mid-2022, according to the latest Monthly Report from economists. Real GDP is expected to have contracted slightly in the third quarter of 2024.

The monthly inflation rate in Germany remained unchanged in September 2024, with consumer prices showing no growth, consistent with preliminary estimates. This follows a 0.1% decline in August, indicating that price pressures continue to ease.

Markets were let down by China's absence of further stimulus measures overnight. After a briefing, the National Development and Reform Commission did not present any new plans, which caused stocks to decline throughout the region.

Fears regarding a decelerating US economy have been temporarily alleviated after Friday's payroll report that exceeded forecasts. The optimistic entiment spilled over into other regions. There are indications of a fresh consolidation until the end of the month, with a significant support level located between 19,000 and 18,830 points.

After reports of an Iranian rocket attack on Israel were confirmed in the afternoon, the DAX had to end the trading day with a discount of almost -0.8% at the day's low, after the US leading stock markets weakened. This led to a short-term deterioration in the DAX chart picture.

On the first day of October, two important events are due that will attract the attention of investors and analysts alike: Nike's quarterly report in the United States and the publication of the latest inflation data for the eurozone. Adding to the excitement is Nike (NKE), which caused a stir last week by announcing a significant leadership change that could have long-lasting implications for the company. Let's take a closer look at these developments and their significance for the market.