Summary:
-
DE30 back to flat after reaching YTD peak
-
US indices pullback from record highs
-
Home Depot results coincide with sell-off
In spite of mixed moods spotted during Asian trading hours, stocks in Europe opened higher on Tuesday. Shares from Germany, Spain and Russia outperformed the most during the opening while Polish and Dutch equities were among top laggards. The upbeat moods prevailed and after an hour of trading, DAX reached fresh YTD high. DE30 finally made a break out of the consolidation range that has limited its moves during the past two weeks.
Start investing today or test a free demo
Create account Try a demo Download mobile app Download mobile appStrong upward move was launched after the opening of today’s cash session. The index smashed through resistance levels at 13265 and 13300 pts and continue to move higher. In turn, a fresh YTD high can be spotted on DE30 chart. In fact, the German index is trading at the highest level since January 2018. However, this rally has subsequently fizzled out somewhat with the market back at 13200 on the European close. This could be seen as a possible false break higher and prior support around 13100 may now be in for a retest.
Technical breakouts higher in European bourses swept the US indices along with futures in all 3 major benchmarks making new all-time highs this morning. There was little by the way of a clear catalyst behind the moves although a bounce in Asian equities overnight no doubt played a part in boosting sentiment.
The Dow Jones Industrial Average began at its highest ever level this afternoon. The market has rallied over 2400 points from the early October low and while price is getting a little stretched with an RSI reading of 73.9, this isn’t too extreme and is lower than previous peaks. The market is the first major index to show some signs of the impending reversal, largely due to a swift drop after Home Depot announced its latest results.
Home Depot, which has a weighting of just under 6% on the broader DJIA index, is trading firmly lower and the release of the firm’s latest results had a clear negative impact on the benchmark. To give a rough idea of the impact the stock can have, when it was trading down by 4.8% in the pre-market this translated to a 78-point drop in the Dow. The results for the 3rd quarter were as follows:
-
Earnings per share: $2.53 vs %2.52 exp
-
Revenue: $27.22B vs $27.53B exp
-
Global same-store sales growth: 3.6% s 4.7% exp
Home Depot is trading in the red and lower by around 4% at the time of writing.
The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.
