Stocks related to defense sector observe a resurgence
German Stock Market Takes a Dip, While Tonies Shines
The German stock market concluded the week on a down note, with the Dax ending at 23,902 points (-0.6%), marking a nearly 2% loss over the week. The benchmark index was affected by uncertainty about the economic outlook, inflation, and future monetary policy of the US Federal Reserve, which dampened investor sentiment.
However, not all sectors fared poorly. Rheinmetall, Hensoldt, and Renk saw significant gains in the Dax and MDax, with Rheinmetall's shares rising nearly 4% at the Dax top. Schaeffler also made strides, with its shares gaining over 5% at the SDax top, reaching their highest level in over 14 months. The positive movement was attributed to Citigroup upgrading Schaeffler's stock from "Neutral" to "Buy" and raising its price target to 6.75 euros. Adesso shares also rose following a buy recommendation from Kepler Cheuvreux.
In a contrasting development, the audio platform for children, Tonies, is set to launch its largest product innovation to date in Europe on September 15. Tonies' shares continued their recovery rally and gained over 12%, with Oliver Wojahn from MWB Research raising his price target for Tonies to 11.70 euros.
The German retail sector had a slow start in the second half of the year, despite an increase in workers' purchasing power in the second quarter. Germany's economy continued to struggle, pushing unemployment above the three-million mark in August for the first time in over a decade.
Meanwhile, across the Channel, the London Stock Exchange was rocked by speculation about a new tax. The shares of major British banks like Natwest, Lloyds, and Barclays took a hit, with the tax proposal suggesting that the British government tax the interest that banks receive for their deposits at the Bank of England (BoE).
In other news, Gerresheimer appointed Wolf Lehmann as their new CFO starting September 1, 2025, replacing Dr. Bernd Metzner who left voluntarily. The change was praised as "long overdue" by Barclays analysts and welcomed by activist investors.
Unfortunately, recent signs of easing in the Ukraine conflict have not yet materialized, leaving geopolitical tensions unresolved. The inclination to save is increasing in light of weak economic indicators, according to economist Thomas Gitzel of VP Bank, who does not expect an upward trend to emerge in the coming months.
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