Summary
- Equities rise following optimistic trade comments from China
- DAX (DE30) revisist resistance zone ranging above the 11775 handle
- Wirecard (WDI.DE) enters partnership with WHSmith (SMWH.UK)
European stock market indices are surging at the beginning of Thursday’s session thanks to optimistic comments from the Chinese commerce ministry spokesman. The politician said that his country opposes escalation of the trade war and holds discussions over the next round of trade talks with the US.
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Morning surge brought DE30 back to the vicinity of the resistance zone ranging above the 11775 pts handle. The index failed to break above in a knee-jerk move but may make another attempt in case upbeat moods prevail. In such a scenario, an attack on the next near-term resistance at 11840 pts handle cannot be ruled out. Source: xStation5
Germany to cut tax rates for small and medium companies?
More and more often we are hearing about the need of launching a stimulus programme in Germany. Peter Altmaier, the German Economy Minister, has proposed a measure today that could help alleviate the impact of economic slowdown on small- and medium-sized companies. The German politician proposed cutting corporate tax rate to 25% for those companies (above 30% now). A point to note is that such companies are the backbone of the German economy as they account for around 60% of all jobs in the country. However, Altmaier did not provide any information on how the move will impact the government's revenue. Altmaier, a CDU politician, is in talks with Olaf Scholz, the German Finance Minister and SDP leader, in order to secure support for the idea from the coalition party.
DAX members after the first hour of trade. Source: Bloomberg
Company News
Moody’s, the credit rating agency, affirmed long-term rating for Continental’s senior unsecured debt at Baa1, hinting at moderate credit risk. However, outlook has been shifted from “stable” to “negative” pointing to a possible deterioration in the future.
Suedzucker (SZU.DE) is underperforming at the beginning of Thursday’s session. The company received a downgrade at Bankhaus Metzler. Bank’s analysts lowered rating for the stock from “buy” to “hold” and slashed price target to €15.90.
Wirecard (WDI.DE) announced entering a partnership with WHSmith (SMWH.UK), the British retailer selling newspapers, books and entertainment products. Under the agreement the two companies will work together to expand digital payment capabilities of the UK company. No financial details of the deal have been disclosed yet.
Siemens Gamesa (SGRE.ES) have won a contract from MidAmerican Energy Company for the supply of wind turbines. Siemens’ (SIE.DE) subsidiary will supply the US company with 21 turbines and will provide maintenance for them over the 3.5 years.
