DE30 returns above 12,500 pts

• European stock markets trade higher

• DE30 bounces off 78.6% retracement and returns above 12,500 pts

• Airbus wins satellite order from Northrop Grumman

European stock market indices are trading higher on Wednesday, in an attempt to launch a relief rally. Major indices from Western Europe gain around 1% today. UK FTSE 100 (UK100) is a top performer with 1.5% gain. Polish WIG20 (W20) lags but still manages to gain 0.3%.

German factory orders data for May, released today at 7:00 am BST, surprised to the upside. Market was expecting a 0.7% MoM drop but instead actual data showed a 0.1% MoM increase. While this is a positive, it's not enough to speak about any turnaround. A seasonally-adjusted year-over-year growth is still negative at -3.1% YoY vs -5.3% YoY in previous month. However, the release went largely unnoticed by markets.

Source: xStation5

German DAX (DE30) experienced another sell-off yesterday and broke below the upward mid term  trendline. A drop was halted at the support zone marked with 78.6% retracement of the upward move started in November 2020 and a low from early-March 2022. Yesterday's daily candlestick had a long lower wick, suggesting that there is some resistance from buyers. Today's candlestick looks like doji and suggests indecisiveness. Traders should keep in mind that in recent days strong selling pressure usually surfaced in the afternoons. Today a potential risk event is release of FOMC minutes. Document from US central bank may help explain reasoning behind 75 basis point rate move and set expectations for the next meeting. If those are hawkish, pressure on equities may increase.

Company News

Airbus (AIR.DE) won a contract from Northrop Grumman, a US company, for 42 satellite platforms and related services. Order is part of the US government programme aimed at boosting defense architecture in space. In other news, Reuters reported that Airbus has reportedly dropped an order for another A350 jet from Qatar Airways, a fourth one. This is a continuation of a legal dispute between European planemaker and Qatari airlines over faulty planes.

Lufthansa (LHA.DE) is one of companies that submitted bids for Italian airline ITA to the Italian government. Lufthansa placed a bid in partnership with MSC, a container shipping company. Among other bidders are Certares, a US tourism-focused investment firm. Transaction is expected to close by the end of the year.

Analysts' actions

• SAP (SAP.DE) downgraded to "equal-weight" at Barclays. Price target set at €102.00

• SAP (SAP.DE) rated "buy" at Berenberg. Price target set at €110.00

• Adidas (ADS.DE) downgraded to "sell" at Hauck & Aufhauser. Price target set at €120.00

• HeidelbergCement (HEI.DE) downgraded to "underperform" at Oddo BHF. Price target set at €45.00

• Nordex (NDX1.DE) downgraded to "hold" at Stifel. Price target set at €9.00

Adidas (ADS.DE) is the worst performing DAX member today, dropping 5%. Stock slides after a downgrade at Hauck & Aufhauser from "buy" to "sell" with price target slashed from €285 to €120. Stock is making another attempt at breaking below the long-term support zone at €160, marked with 61.8% retracement of the upward move started way back in 2014. However, this time it looks like an actual break may be made. W1 interval. Source: xStation5