German stocks faced a downward trend at the close of the trading week as investors analyzed the latest labor market data from the United States and considered its implications on interest rate decisions within the world's leading economy. The blue-chip DAX index concluded the trading session down by 0.50%.
Reports indicated that the US economy saw the addition of 256,000 jobs in December 2024, exceeding the previous month’s increase of 212,000 and surpassing the consensus estimate of 160,000. In contrast, the unemployment rate stood at 4.1%, which was better than the prior and expected rate of 4.2%.
According to Nancy Vanden Houten, Oxford Economics Lead US Economist, the December employment report demonstrated solid growth and would likely influence the Federal Reserve's stance regarding gradual interest rate cuts in 2025. While the forecast suggests three rate cuts in the coming year, the report heightens the possibility that fewer cuts may occur and that the Fed might hold off on reducing rates as early as March, which had initially been a part of the baseline expectation. Shifting the focus back to Germany, the nation reported a trade surplus of 24.1 billion euros in November 2024, reflecting a month-over-month increase of 10.4 billion euros.
This latest statistic indicates a positive trend in goods trade surplus, alongside a return to surplus for 'invisible' current transactions. Looking ahead in economic news, next week is set to unveil full-year gross domestic product (GDP) data for 2024. Analysts are predicting that Germany's economy may contract by 0.2% over the year, a slight improvement compared to the 0.3% decline observed in 2023. On the corporate front, automotive giant Mercedes-Benz ($MBG) witnessed an uptick of 3.73% on Xetra following the report of a 5% increase in quarterly sales during the final quarter of 2024, even though full-year sales experienced a 4% annual decline.
MWB Research also reaffirmed its buy rating on Auto1 Group ($AG1), raising its price target from 12 euros to 19 euros. However, Auto1's stock closed 2.64% lower. Analysts noted, 'The MDAX inclusion adds another layer of credibility to the company's recovery narrative, which further boosts investor confidence concerning AUTO1's long-term growth trajectory.'.