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German government revised GDP forecasts for 2020 and 2021
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DE30 bounces off the 13,000 pts handle
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Daimler (DAI.DE) will deliver 1,200 electric vans to Amazon
European market started the day higher and held onto these gains in the first hours of Tuesday trade. Weakness can be spotted on the UK market but one should keep in mind that UK stock exchanges were closed yesterday so we may be observing a "catch-up move".
German government revised GDP forecasts for 2020 and 2021
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Open account Try demo Download mobile app Download mobile appGerman government released an updated set of economic growth forecasts today at 10:00 am BST. German authorities expect a 5.8% contraction in 2020, up from 6.3% drop seen in April. However, the economic growth forecast for 2021 was lowered to 4.4% from 5.2% seen in April's release. Private consumption is expected to drop 6.9% in 2020 before rising 4.7% in 2021. Exports are seen dropping 12.1% in 2020 and rising 8.8% in 2021. German Economy Minister Altmaier said that he does not expect another coronavirus lockdown that will be similar to the one from March-April 2020.
Source: xStation5
Rally on DE30 lost steam and the index began to decline. A clear downward channel can be spotted on the H1 and DE30 made a failed attempt of breaking above the upper limit at the start of today's cash session (orange circle). Downward move followed but the index found support near 13,000 pts handle - a level marked by previous price reactions as well as the 200-hour moving average (purple line). Should we see a resumption of downward move in the later part of the day, the index could be set to the test price zone at 12,935 pts, that can be found slightly above the upper limit of the aforementioned channel. On the other hand, should the index see a recovery in the afternoon, another test of the upper limit of the channel at around 13,090 pts could be on the cards. Release of the US ISM manufacturing index for August at 3:00 pm BST is a potential risk event for equities and overall sentiment.
DAX members at 10:10 am BST. Source: Bloomberg
Bayer (BAYN.DE) agreed to acquire Care/of, a US company selling vitamin subscriptions as well as reusable drink containers. Bayer will buy 70% stake in the company at a valuation of $225 million. However, the German company will retain an option to buy the remaining 30% by 2020.
According to media reports, Amazon (AMZN.US) and Daimler (DAI.DE) have reached a deal on electric vehicles. Daimler will deliver 1,800 electric Mercedes Benz vans to Amazon with a deal expected to be closed by the end of 2020. Agreement includes 1,200 eSprinter vans and 600 eVito vans.
Zalando (ZAL.DE) is one of the best performing German stocks today. E-commerce company benefits after receiving an upgrade at Goldman Sachs. The Bank boosted recommendation for the stock from "Neutral" to "Buy". Price target was raised from €71 to €87.
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