DE30: Fresenius Medical Care slumps after earnings

Summary:

• US seeks to start trade talks with EU, UK and Japan

• DAX (DE30 on xStation5) struggles in the vicinity of 33-period moving average

• Fresenius Medical Care (FME.DE) sinks after releasing poor earnings report

The bullish spree on the global stock markets continued as major European stock indices moved higher during Wednesday’s opening. Gains were seen all across the continent with Swiss, Belgian and Dutch equities advancing the most. Shares in the UK, Spain and Sweden lagged a bit behind other region peers but still managed to gain at the beginning of the European session. Financials and chemical stocks were among outperformers while food companies were the only sector subindex from the Euro Stoxx 600 index to open lower on Wednesday.

DE30 broke slightly above the 33-period moving average on the H4 interval (green line) yesterday. However, despite higher opening today the German benchmark rushed lower and found itself beneath the aforementioned technical hurdle. Notice that in case the index breaks above the moving average once again the resistance zone ranging 11870-11970 pts may turned out to be a major hurdle for the bulls. Source: xStation5

As Brexit is a major theme in the EU right now one can easily forget about other sources of uncertainty. One such source is protectionism in the US and how trade relationship with the World’s biggest economy will look like amid it. There is a chance for the situation to be made more clear in the months to come. White House officially notified Congress that trade talks with Japan, The European Union and the United Kingdom may start in three months. The US Trade Representative Robert Lighthizer said that he would like the negotiations to start as soon as possible. However, it should be noted that under the US trade law White House needs to notify Congress about incoming trade talks three months earlier and cannot start negotiating until that period is over. When it comes to the United Kingdom it is almost certain that it will take longer than 3 months to initiate talks as Lighthizer already said that it will seek to start negotiations after the Brexit date in March.

Major European stock benchmarks after the first hour of trade:

• DAX (DE30): +0.04%

• FTSE 100 (UK100): +0.15%

• CAC40 (FRA40): +0.42%

• IBEX (SPA35): +0.16%

• FTSE MIB (ITA40): +0.52%

Fresenius Medical Care (FME.DE) and Fresenius Se (FRE.DE) slumped on Wednesday after the former issued lacklustre earnings report and profit warning for the whole fiscal year. Source: Bloomberg

Company News

Fresenius Medical Care (FME.DE) is the worst performing DAX stock on Wednesday morning. As a reason behind such poor performance one can name an earnings report the company released recently. Fresenius Medical Care had net income of €310 million in the third quarter of 2018 against expected €345.75 million. Revenue turned out to be €4.058 billion while markets expected €4.225 billion. In turn the EPS of €1.007 was 9.7% lower than consensus estimate of €1.115. Moreover, the company issued a profit warnings for the whole fiscal year 2018. Apart from Fresenius Medical Care its parent company, Fresenius SE, also plunged after earnings release. Fresenius SE owns around 30% of Fresenius Medical Care.

Fresenius Medical Care (FME.DE) began to underperform after reaching peak at €93.80. The stock managed to bounce off the upward trendline at the beginning of this week and moved to the 200-session moving average. Nevertheless, poor earnings report caused the stock to launch today’s trading with enormous downward price gap. Source: xStation5