German equities have commenced the first trading session of 2025 on a positive note, as investors react to the latest disappointing manufacturing data from the eurozone’s leading economy. The beloved DAX index, representing a basket of blue-chip stocks, recorded a commendable increase of 0.58% by the closing bell on Thursday. According to the latest HCOB PMI survey, Germany’s manufacturing sector ended 2024 on an unfavorable note, with the index declining to a three-month low of 42.5 from the previous 43.
This decline paints a picture of accelerated reductions in both output and new orders amidst a backdrop of weak demand. Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank, remarked, "After two-and-a-half years of deteriorating business conditions in the manufacturing sector, this trend might reverse in the second half of 2025.
By that time, we expect Germany to be under new government leadership, which may catalyze a shift from the current cautious attitude toward investment and consumption. However, finding concrete support for this assertion within the current data presents a challenge." Looking at broader trends across the eurozone, the manufacturing PMI also dipped to a three-month low of 45.1 in December 2024.
While new factory orders and output have decreased, it is noteworthy that business confidence has surged to a four-month high, indicating some resilience in the market. In the realm of corporate developments, Airbus ($AIR) emerged as the top-performing stock in the DAX, rising by 3.47% during the trading session.
Analysts at Bank of America (BofA) anticipate that the aircraft manufacturer will achieve over 110 deliveries in December 2024, culminating in a total of 750 to 760 jets for the entire year — slightly below their guidance of 770 jets. "Airbus is among our '25 stocks for 2025' that we believe are poised for substantial business or market-related catalysts this year, positioning them well for potential outperformance," BofA commented in a detailed note to investors. Overall, German investors appear cautiously optimistic as they navigate through the latest economic data, looking towards future indicators of recovery and investment in the manufacturing sector.
The performance of key stocks like Airbus may provide critical insights into the broader market trends as 2025 unfolds..