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European equities try to recover
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DE30 bounces off the lower limit of the Overbalance structure
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Lufthansa (LHA.DE) struggles to secure state aid in Belgium
European markets launched today's cash session lower, deepening yesterday's declines. However, most of the major indices from the Old Continent managed to get back above the flatline. DAX (DE30) is trading around 0.5% higher on the day. Polish WIG20 (W20) is trading around 3% lower (Polish stock exchange was closed yesterday and is catching up with the rest).
German government reportedly agreed on a value-added tax reduction. The measure was included in the second German stimulus package. Discussions over implementation of the package are currently taking place.
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DE30 dropped around 9% from post-pandemic high to today's overnight low. However, the index managed to halt decline at 11,800 pts area and as one can see on the chart below, this level is marked with previous price reactions as well as the lower limit of the Overbalance structure. Ongoing correction matched the range of the previous biggest pullback of the current upward impulse and recovery started. This is an encouraging sign for bulls. On the other hand, the 50-hour moving average is about to cross the 200-hour moving average from above (orange circle). Such a pattern is called a 'death cross' and is considered a bearish pattern. Nevertheless it is often a late signal and investors should not give it much credit unless we see price break back below the lower limit of the Overbalance structure.
Source: xStation5
When the US court banned use of dicamba-based herbicides recently, it has allowed farmers to use the product until the end of July. Now the Center for Food Safety appealed the decision and asked the court to ban sales of dicamba-based herbicides immediately. Bayer (BAYN.DE) and BASF (BAS.DE) are among companies producing dicamba-based herbicides.
According to the L'Echo report, talks between the Deutsche Lufthansa (LHA.DE) and the Belgian government have stalled. Two parties were discussing state aid for the German carrier and could not agree on penalties Lufthansa would face should it violate terms of the deal.
Analysts at M.M. Warbug issued a downbeat note on MTU Aero Engines (MTX.DE). They say that the recent recovery in MTU share price does not reflect pessimism seen in comments from industry executives. They say that the outlook for the aviation industry did not improve materially since aircraft manufacturers decided to scale back production due to Covid-19 pandemic. Recommendation for the stock was cut from "hold' to "sell". Price target was set at €128
Deutsche Bank (DBK.DE) is planning to speed up closures of retail branches in order to save costs. Closures are expected to save around €200 million euros.
DAX members are making slow recovery on Friday. Source: Bloomberg
