DE30 struggles near 13,500 pts

• European stock markets trade lower

• DE30 trades near 13,500 pts

• Daimler released solid preliminary results

European stock markets are trading lower with the majority of Western European blue chips indices dropping around 1%. Better-than-expected GDP data from Spain and Germany failed to prop up the sentiment. Risk-off moods can be reasoned with vaccine delays as well as the volatile situation on the US stock market. Short squeezes carried out by retail investors threaten to make big losses for hedge funds and it could start a deleveraging process that may have an impact on the broad market.

Source: xStation5

DE30 managed to recover from a drop yesterday. However, the German index failed to break above the 33-period EMA at H4 interval and painted a lower high. Downtrend structure was maintained and we can observe a downward move today. The index managed to recover from daily lows at 13,400 pts and this is the level to watch should a sell-off resume. 13,400 pts area is marked with the lower limit of the Overbalance structure and breaking below it could mean that downward move is about to accelerate.

Company News

Daimler (DAI.DE) published better-than-expected preliminary results for 2020. German carmaker said that its full-year EBIT reached €6.6 billion, smashing the market consensus of €5.25 billion. It marks an over 50% increase from 2019 results. Company reasoned solid results with cost discipline and faster than expected recovery in the automotive segment. Daimler said it expects positive developments to carry into 2021 as well.

Qualtrics, unit of SAP (SAP.DE), had a very successful US IPO yesterday. Company jumped almost 40% during Nasdaq debut and has reached a valuation of nearly $21 billion. According to SAP's CFO, applying the same stock multiples to SAP's cloud revenue would value the segment at $133 billion. Whole company, cloud + non-cloud businesses, is valued at around $156 billion currently. Cloud represents less than half of SAP's total revenue.

Manfred Knot, CEO of Commerzbank (CBK.DE), outlined an ambitious plan to cut costs at the bank. Plan includes removal of 10,000 jobs, or a quarter of the global workforce, as well as reducing the number of branches worldwide from 800 to 450 by 2024. Plan will be discussed with the supervisory board and is expected to be finalized by February 3. However, some supervisory board members have already expressed their dissatisfaction with the scale of job cuts.

Daimler (DAI.DE) is trading higher following the release of solid preliminary results. Stock tested swing area at €58.50, that marks the upper limit of a recent trading range, but failed to break above it and a pullback can be observed at press time. In case the stock resumes upward move and breaks above €58.50, traders should keep in mind that we have seen some false breakouts recently that often reverse near the €59.50 area. Source: xStation5