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European stock markets trade higher
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DE30 tests 38.2% retracement near 15,390 pts area
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Covestro expects solid Q3 earnings
Stocks in Europe are trading higher on Wednesday in an attempt to recover from yesterday's losses. German DAX and French CAC40 gain 0.9% while Dutch AEX outperforms and trades 1.1% higher. There are no major data releases scheduled for today but later in the day (4:45 pm BST) chiefs of ECB, Fed, BoJ and BoE will take part in a panel discussion at ECB forum.
Flash HICP inflation data from Spain has been released today at 8:00 am BST. Reading showed an acceleration from 3.3% to 4.0% YoY while the market expected 3.3-3.4% YoY reading. This is important as the Spanish report is published a day ahead of French and German readings and those tend to move in the same direction. A significant unexpected acceleration in euro area price growth will mount pressure on the ECB to act and this may be poorly received by equities.
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Source: xStation5
DE30 found support at 23.6% retracement of the whole downward move started in mid-August. This is the same area that served as a swing level during a recovery move last week. The upward move has been halted by the 38.2% retracement (15,390 pts area) later on but another attempt cannot be ruled out. The main resistance level to watch is marked with 50% retracement (15,500 pts). Note that the downward trendline can be found slightly above therefore a break above those two hurdles would make the outlook much better for bulls.
Company News
HeidelbergCement (HEI.DE) bought a 45% stake in Command Alkon, a company developing software and technology used in construction supply chain management, from Thoma Bravo for an undisclosed amount. Reuters reported based on its own sources that the deal valued the company at $1.7 billion. HeidelbergCement hopes that partnership with Thoma Bravo, who retained 55% stake, will help it transform into an industrial-tech company.
Covestro (1COV.DE) said that it expects its Q3 EBITDA near the upper range of €760-860 million forecast. Company also plans to build a manufacturing plant for MDI chemicals, a project that was suspended at the beginning of 2020. Plant will be located either in the United States or in China.
Deutsche Bank (DBK.DE) said that it plans to return 5,000 employees to offices in New York City over the next half a year as the situation is getting back to normal. However, most of the employees will still have flexible work schemes that would include remote work.
Covestro (1COV.DE) rallies today. Stock is attempting to make a break above the upper limit of recent trading range. Price is approaching recent local high at around €59.75 and may be about to break at 6-month highs. Source: xStation5
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