Following yesterday's talks at the White House, it is becoming increasingly clear that the burden of financing support for Ukraine will be shifted to Europe, but defense contracts will largely go to American arms companies. Until recently, it was believed that the European defense sector would become a driving force for local stock exchanges, attracting capital and supporting industrial development. However, it turns out that Europe's role will be limited mainly to providing funds, rather than participating in large-scale production. As a result, the shares of European arms companies are now falling sharply, signaling investors' disappointment with their earlier expectations. This is dampening the relatively good sentiment we have seen in other segments of the stock market.
The reaction to yesterday's negotiations/discussions at the White House is most evident in the defense sector. Today, it is clearly losing ground after the President of Ukraine announced that Ukraine wants to purchase $100 billion worth of weapons from the US defense sector with European Union money. This information did not go down well with shareholders of European competitors. Shares in Germany's Rheinmetall are down nearly 4% today. Source: xStation
Despite this, the German DE40 maintains a stable upward trend. The most important support zones remain the 50- and 100-day exponential moving averages, which in the past have often acted as resistance for market sellers. On the other hand, the historical peak of nearly 24,735 points remains a key resistance level. Source: xStation
Daily summary: Dollar loses ground after NFP; OIL.WTI at its lowest since 2021 💡
OIL.WTI loses 2.5% 📉
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