DE30 jumps aboves 13,000 pts as equities rally

• Global equities rally on Trump's tax cut idea

• DE30 jumps above 13,000 pts

• Zalando (ZAL.DE) reported Q2 earnings

European stock markets and US futures are rallying after President Donald Trump hinted on an idea of cutting capital gains tax. DAX gains around 2.5% and trades at a level not seen since July 24. Gains can be spotted all across the Old Continent with Portuguese PSI and Swiss SMI being laggards. PSI and SMI trade "only" 1% higher.

German ZEW institute released a new set of indices today. Expectations index for August jumped from 59.3 to 71.5 pts (exp. 55.8 pts). Current situation index dropped from -80.9 to -81.5 pts (exp. -69.5 pts). Indices showed that a quick recovery from Covid-19 downturn remains the base case scenario for many. However, poor current situation index reading also shows that, so far, recovery has been subdued. Institute noted that domestic sectors are likely to recover faster on rebuilding demand but poor earnings outlook for the financial sector (banks and insurers) remains a concern.

DE30 finally managed to break above the support at 12,750 pts, that is marked with 50% retracement of the late-July correction. German index surged this morning and jumped above the 13,000 pts mark for the first time since July 24. The near-term resistance to watch stretches between 78.6% retracement at 13,065 pts and swing level at 13,000 pts. However, traders should keep in mind that today's gains were very rapid and, in turn, there is a risk of a short-term correction. Source: xStation5

Zalando (ZAL.DE) reported Q2 earnings report today. The German e-commerce company said that its net profit surged from €45.5 million in Q2 2019 to €122.6 million in Q2 2020. Revenue increased from €1.6 billion to €2.03 billion. Gross merchandise volume (GMV) grew 33% YoY, to €2.69 billion. Zalando said that 180 new partners entered its partnership program. Company expects full-year GMV to increase 20-25% while revenue is expected to jump 15-20%.

Bayer (BAYN.DE) has agreed to acquire UK biotech, KaNDy Therapeutics, for $875 million. KaNDy focuses on women's healthcare. $425 million will be paid as an initial, upfront payment but potential milestone payments of $450 million are also included in a deal.

TUI (TUI.DE) has extended cancellation of holidays booked in Spain, Balearic Islands and Canary Islands until August 16. The decision relates to British people as the UK Foreign Office continues to advise against all non-essential travel to Spain. Customers who booked holidays to Spain beyond August 16 were given an option to cancel their trip and get a refund.

DAX members at 10:19 am BST. Source: Bloomberg