EUROPEAN EQUITY UPDATE: DAX 40 choppy post-German elections; regional sentiment mostly positive

STOXX 600: +0.1%

• European bourses opened modestly, and on either side of the unchanged mark (though the DAX 40 outperformed after the German election – details below). At the cash open, some pressure was seen, which was then exacerbated in the hour following; for reference, the DAX 40 erased the initial upside of +1% to flat.


• Thereafter, a considerable bounce was seen across the complex; as it stands, indices are mostly firmer.


• On the data front, the German Ifo survey was mixed; Current Conditions and Business Climate fell a touch, whilst New Expectations printed a little better. Overall, the data had little impact on price action.

Sectors: Mixed

• European sectors are mixed. Sectors initially opened with a narrow breadth, but performance is now varied.


• Utilities take the top spot, lifted by renewable names after the German Election; Merz has previously favoured their use. Strength in German auto names have lifted the Autos sector.


• The Basic Resources sector is the laggard thus far, with the downside attributed to mostly lower metals prices.

Majors: DAX 40 +0.9%, FTSE 100 +0.3%, CAC 40 -0.1%

• A choppy session for the DAX 40, but the index is the clear outperformer in Europe following the German Election, which has seemingly spurred investor confidence in the region. To recap, CDU/CSU win the election, with Merz likely to be Chancellor of a Grand coalition; although some risks of a blocking-minority (AfD + Die Linke) exist. Gains are generally broad-based, though Siemens Energy (-4.5%) lags; this could be attributed to the likelihood of Greens being omitted from the coalition, as CSU leaders have spoken strongly against them being involved.


• In terms of stock specifics; Just Eat Takeaway (+55%) soars after Prosus agreed to acquire the co. for EUR 20.30/shr, which represented a 49% premium over the three-month VWAP. Over to Italy, but sticking with M&A, Saipem (-0.5%) has signed an initial merger deal with Subsea7 (-2%), worth around USD 4.6bln.

US Equity Futures: ES +0.6%, NQ +0.6%, RTY +0.7%

• Futures are modestly firmer across the board, with very slight outperformance in the RTY, following significant losses seen in the prior session.


• Warren Buffet’s Berkshire Hathaway reported its Q4 results over the weekend; once again the co. increased its cash reserve to a record high and sold over USD 134bln of stocks; the co. gave no clear reason in its annual letter. However, Buffett did push back against media agenda that he has lost his appetite for stocks.


• The US Day sees the release of the National Activity Index for January and Dallas Fed manufacturing report for February. Notable corporate earnings from the US today include DPZ, FANG, PSA, OKE, CLF, ZM, HIMS.

24 Feb 2025 - 09:55- EquitiesResearch Sheet- Source: Newsquawk