In recent trading sessions, German equities remained largely stagnant as analysts and investors processed the latest local data to assess its implications for the broader economic landscape of Germany. On Wednesday, marked by relatively low trading volumes attributed to a US holiday, the blue-chip DAX index ended the day down slightly, closing at a modest 0.07% drop. The report for November includes promising news, highlighting a significant uptick in Germany's monthly industrial production, which increased by 1.5%.
This rebound followed a decline of 0.4% in the prior month, surpassing analysts' consensus estimates that anticipated a more modest recovery of just 0.5%. Nevertheless, when evaluating the annual data, the industrial output index reflected a decrease of 2.8%, indicating challenges in sustaining long-term growth. In contrast, Germany's trade surplus showed marked improvement, rising to 19.7 billion euros—a notable increase from the 13.4 billion euros recorded in October.
The monthly export levels experienced a growth of 2.1%, while imports showcased a decrease of 3.3%, underscoring a positive shift in the country’s trade dynamics. Looking ahead, analysts have their sights set on the forthcoming release of the preliminary estimate for Germany's GDP growth in 2024.
Predictions suggest that the economy may face a persistent stagnation, with indications that it might record a second consecutive year of contraction. This trend would represent a significant departure from growth, marking the first occurrence of back-to-back years of economic decline since the early 2000s.
"Next week will bring the first estimate of German GDP growth in 2024 and it currently looks as if the economy will have had another year of meagre contraction," ING noted in their analysis. On the corporate front, shares of About You Holding (also known as $YOU.DE) closed unchanged on the Xetra exchange following a reiteration of a sell recommendation by mwb research.
This update, which set a price target of 6.50 euros, was prompted by the company's recently released fiscal results for the third quarter. "AY's Q3 results were mixed. The DACH region displayed robust growth and improved profitability; however, the firm continued to face challenges in Return on Equity (RoE) related to top-line growth.
On a positive note, the stability of their gross margin alongside improved cost control is encouraging," mwb research concluded. Additionally, Bayer (traded as $BAYN) announced that its investigational drug elinzanetant successfully met the primary endpoint in the late-stage Oasis 4 clinical study, demonstrating a substantial reduction in the frequency of moderate to severe vasomotor symptoms—commonly known as hot flashes—associated with breast cancer treatments.
The response to the news saw Bayer's stock rise by 0.47% by the end of trading..