DE30: Upbeat moods prevail as Christmas break approaches

• European equities gain following upbeat US and Asian sessions

• DE30 snapped losing streak but failed to break above key resistance at 13310 pts

• Adidas (ADS.DE) lags after Nike earnings missed gross margin estimates

Stocks in Europe are trading higher on the final trading session of the week. Upbeat moods on the Old Continent echo good performance of equity indices during yesterday’s US and today’s Asian session.

 Indices from Wall Street reached fresh all-time highs yesterday as investors looked past Trump’s impeachment and focused on signing of USMCA bill by the US House of Representatives. There are not any major data releases from Europe scheduled for release today therefore indices from the Old Continent may enjoy smaller volatility until the opening of the US stock markets at 2:30 pm GMT.

Source: xStation5

DE30 underperformed significantly this week but managed to halt declines at the support zone ranging around the 13175 pts handle. A point to note is that this zone is also marked with the lower limit of the Overbalance structure. The German index bounced off this hurdle over the night and rallied. Upward moved was halted slightly below the 13300 pts. The index is pulling back at press time but in case bulls manage to regain control over the market, one cannot rule out a test of the resistance zone ranging around the 13310 pts. This resistance also marks the upper limit of the Overbalance structure therefore a break above it could hint at reversal of short-term trend.

DAX members at 10:07 am GMT. Source: Bloomberg

Australian federal court ordered Volkswagen (VOW1.DE) to pay A$125 million in penalties for making false statements related to diesel emissions. Around 57 thousand vehicles were required to have their engine control software updated.The German carmakers said that he will determine over the coming weeks whether to appeal or not.

Apollo Global Management, the US private equity firm, is said to be among parties interested in buying mBank (MBK.PL) - Polish unit of Commerzbank (CBK.DE). Following an 11% drop in share price this year, market capitalization of mBank sits at around $4.2 billion. Commerzbank asked for the first round of bids to be submitted by mid-January 2020.

Adidas (ADS.DE) and Puma (PUM.DE) are among stocks to watch today. Nike (NKE.US), the US footwear manufacturer, reported earnings for the fiscal Q2 yesterday after session close. While the US company managed to beat earnings expectations, it has disappointed in terms of gross margin. Moreover, inventories grew to an all-time high.

Adidas (ADS.DE) slipped from an all-time high at the beginning of August 2019. The stock managed to recover slightly later on but got locked in a sideways move between 38.2% and 78.6% retracement levels of August’s correction. The stock is attempting to break above the upper limit of the range and in case manages to do so, a test of the ATH at €296 could be on the cards. Source: xStation5