The blue-chip DAX index was little changed at 0.05% in the red on Wednesday's close, as market watchers face the possibility of a winter recession in Germany following the latest downbeat economic data. Destatis data shows that Germany's new orders in manufacturing fell 5.4% month over month in November 2024, contrasting sharply with the previous month’s decline of 1.5% and the consensus estimate of zero growth.
Additionally, monthly retail sales experienced a downturn, decreasing by 0.6% and falling short of the analyst forecast of a 0.5% increase. According to analysts at ING, "Notwithstanding some more technical rebounds, there is still no trend reversal in sight for the German industry. It's bottoming out at best.
At the same time, disappointing retail sales suggest that the rebound in private consumption in the third quarter is unlikely to continue in the fourth quarter." Their analysis indicates that the macroeconomic data presents clear indicators of weakness within the German economy during November, reinforcing the outlook for a mild winter recession. Looking ahead, significant German economic reports are set to be released, including the latest international trade report and industrial production figures due tomorrow.
Concluding the week will be the current account report, which is expected on Friday. On the corporate side, SAP saw a modest increase, gaining 0.60% on Xetra after Baader Helvea expressed optimism regarding the German software group’s ability to meet its targets for 2024, prior to the results publication set for January 28.
"We are expecting SAP to have delivered a solid finish to the year in a challenging macro environment and that the company delivered on its promises for 2024," analysts noted in their report. Covestro is making significant investments, allocating a low triple-digit million-euro amount to enhance production lines and infrastructure at its compounding factory located in Hebron, Ohio.
The polymer materials producer also experienced a slight increase of 0.57% at closing. The economic landscape in Germany presents multifaceted challenges as the indicators accumulate, raising concerns among businesses and consumers alike..