German shares concluded the trading week on a negative note, with the DAX index dropping by 0.43% at Friday's close, following an unexpected increase in producer prices for industrial products. Recent data from the Federal Statistical Office revealed that German producer prices rose by 0.1% year over year in November 2024, a contrast to the 1.1% decline in October and below the consensus estimate of a 0.3% fall.
This marks the index's first annual increase since June 2023, largely due to heightened capital goods prices. In additional economic developments, the business climate in the German retail sector saw a slight decline during the holiday season, with the indicator decreasing to -23.0 points in December from -22.2 points in November, as reported by the ifo Institute.
Both the current situation and business expectations demonstrated a downturn during this month. Patrick Höppner, an expert from ifo, commented, "2024 was very challenging for the retail sector. The overall economic environment is likely to remain difficult in 2025, even though many retailers are hoping for an improvement in consumer sentiment." The upcoming week is expected to be quiet in terms of economic news releases due to the Christmas holidays, with the next significant indicator, import prices, set to be released on December 30. In corporate news, mwb research has downgraded its rating on ProSiebenSat.1 Media ($PSM) from buy to hold and reduced its price target from 6 euros to 5 euros.
This adjustment is attributed to the challenges that the German media group is encountering in its traditional television business, compounded by growing competition from streaming services and a downturn in advertising markets. The company's stock fell by 2.41% at the close on Xetra. According to mwb research, "The weak economic situation in the DACH region is adversely impacting consumer spending, thereby affecting the advertising budgets of PSM's customers.
The operational core business is particularly subject to this adverse trend, as evidenced by disappointing nine-month figures.".