DE30 struggles near the 12750 pts handle

• Mixed beginning of the European session

• DE30 struggles near the 12750 pts handle

• SAP (SAP.DE) partnered with Microsoft (MSFT.US)

European indices lack common direction at the beginning of Tuesday’s session. However, we can spot a pattern as benchmarks from the Western Europe trade lower while indices from the eastern part of the Old Continent move higher. French equities lag the most while Swedish shares outperform.

Source: xStation5

After a brief stop in the vicinity of the early-July peak (12645 pts), the German DE30 (DAX futures underlying) resumed an upward move. The index saw a strong move higher yesterday but is treading water at the beginning of today’s session. The first resistance to watch is marked by the local peak from the turn of July and August 2018 (12825 pts). In case the UK parliament votes in favour of a Brexit deal, one could expect European indices to catch a bid. Should the upward move be accompanied with a solid momentum, the next resistance in line (13160 pts) could come into play. Thursday is also likely to be a big day for the German index as preliminary PMI data for October will be released. Another disastrous reading could push the index lower. Another event to watch on Thursday is ECB meeting. However, it is expected that the Bank will refrain from making major policy adjustments on the Draghi’s final meeting.

DAX members at 9:00 am BST. Source: Bloomberg

Executives of the Deutsche Bank (DBK.DE) keep looking for areas where cost reductions are possible. According to the latest reports, the Bank is considering slashing headcount at its rates trading division by at least 10%. While this may sound like a lot, less than a thousand people are employed at the division, so a cut of 10% would mean that fewer than a hundred jobs are at risk.

SAP (SAP.DE), the German software firm, unveiled on Monday that it has partnered with its rival Microsoft (MSFT.US). Under the partnership, Microsoft will help SAP transfer its clients from on-premise enterprise software to cloud applications. The partnership was launched during the third quarter of 2019 and has already made significant contribution to Q3 results. SAP’s new cloud bookings grew 39% in the Q3 2019 and Microsoft partnership is said to contribute 19 percentage points to this figure.

TUI (TUI.UK and TUI.DE) is trading lower today, following a downgrade at Morgan Stanley. The Bank reduced rating for the stock to “equal-weight”. Analysts reasoned their decision by saying that grounding of Boeing 737 MAX aircraft is expected to drag on longer than expected. In turn, the Bank expects TUI to issue weakish full-year forecast for 2020. Price target for the UK-listed shares was set at 1050 pence.

SAP (SAP.DE) pulled back from the all-time high at €125 but resumed an upward move after finding support at the 200-session moving average (purple line). Stock smashed through subsequent resistance and retracement levels and trades just 4% below its ATH. In case the upbeat sentiment towards the stock prevails, a test of the €125 handle could be a matter of time. Source: xStation5