Summary:
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CDU to elect new leader in the afternoon
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DAX (DE30 on xStation5) tries to climb back above the 11000 pts handle
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Fresenius SE (FRE.DE) issued a second profit warning in two months
European stock indices recover today after severe losses accounted during yesterday’s session. Swedish and UK equities are outperforming their peers from the region while Russian and German stocks lag the most. Retailers and personal goods companies can be found among leaders while automobile industry lags the most.
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DE30 plunged severely yesterday touching the lower bound of the support zone ranging 10760-11830 pts. After opening higher today the benchmark once again moved lower. However, this initial loss was largely pared already therefore there is a chance that the German benchmark will crawl back above the psychological 11000 pts handle. Note that the index price movements may be subject to domestic political issues. Source: xStation5
Earlier this week we wrote about the German Christian Democratic Union leadership vote that will take place on Friday. Indeed, members of the Germany’s leading party will meet today at 9:30 am GMT. Leadership vote is scheduled at 2:00 pm GMT but the timing may change in case debates scheduled earlier prolong. With three candidates taking their chances there is a possibility that a run-off round will need to be held. Having said that, results are expected to be announced in early evening. The CDU party meeting will last until tomorrow.
The final European GDP report for the third quarter of the year was released at 10:00 am GMT. The reading disappointed a bit as it showed European growth of 1.6% YoY against 1.7% YoY signalled in previous readings. On a quarterly basis growth figures matched estimates of 0.2% QoQ advance. Fixed investments, employment and government spending all rose by 0.2% QoQ while the household consumption advanced 0.1% QoQ in July-September period.
Major European stock market indices after the first two hours of trade:
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DAX (DE30): +1.00%
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FTSE 100 (UK100): +1.61%
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CAC40 (FRA40): +1.49%
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IBEX (SPA35): +1.23%
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FTSE MIB (ITA40): +1.07%
Wirecard (WDI.DE) surges following upbeat analyst action while Fresenius (FRE.DE) plunges on another profit warning. Source: Bloomberg
Company News
Fresenius SE (FRE.DE) is the worst performing DAX stock on Friday morning. The company issued a profit warning saying that it most likely will not meet its financial goals through 2020. The company named sluggish growth in its hospital division as well as legal proceedings concerning its latest North American acquisition. This is the second profit warning from this company during the past two months. Fresenius Medical Care (FME.DE)
On the other hand, Wirecard (WDI.DE) is the DAX leader today. The company was recommended by Jyske Bank as “buy”. The one-year price target was set at €160, implying an over 16% increase from the current market price.
BMW (BMW.DE) trades slightly lower today following a downgrade received at Commerzbank. The Bank reduces car makers recommendation from “hold” to “reduce”. The price target was also lowered from €87 to €70, implying around 3% discount in comparison to current market price.
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