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European indices sink on Wednesday
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DE30 test lower limit of trading range at 9,500 pts
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Continental (CON.DE) withdrew outlook for fiscal-2020
Stocks in Europe are trading under significant pressure on Wednesday morning. Indices from Germany, France, UK and the Netherlands trade over 3% below yesterday’s closing prices. US500 futures dropped below 2,500 pts. ADP data (1:15 pm GMT) and ISM manufacturing (3:00 pm GMT) are potential market-moving releases scheduled for today.
Revised PMIs from European countries were released today. Headline readings did not deviate much from preliminary print but details are worrying. The “New Orders” sub index dropped hard in almost every country. 31.1 pts in Italy and 34 pts in France are the lowest readings since early-2009. Readings below 40 pts were also registered in Sweden, Switzerland and Germany. Lack of orders hints that the economic rebound is still far off.
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Source: xStation5
DE30 dipped and tested 9,500 pts handle at the beginning of today’s European session. In turn, the German index realized the range of the head and shoulders pattern painted yesterday. As bears were unable to break below the 9,500 pts handle, a rebound started. The first resistance to watch can be found at 9,700 pts. Given poor moods, today’s trading may be locked in the 9,500-9,700 pts range. However, should a break above occur, the 10,000 pts mark remains key resistance. Note that recent price action (orange circle) suggests that bears are still in control.
DAX members at 9:27 am GMT. Source: Bloomberg
Continental (CON.DE) decided to withdraw its outlook for fiscal-2020 due to the coronavirus pandemic. Around 40% of the company's production sites have ceased activities for some time. Continental is adjusting working times as well as salaries to adapt to the situation. The company also plans to reduce demands on liquidity. Continental had €2.3 billion in cash or equivalents and €4.6 billion in unused credit lines as of the end of February 2020.
Herbert Diess, CEO of Volkswagen (VOW3.DE), said that the German carmaker is still operational but is operating at a loss. Executive claims that the company is losing around €2 billion each week due to the coronavirus pandemic.
Fresenius Medical Care (FME.DE) announced that it is working with other US dialysis providers in order to provide care for people with kidney problems that are currently in isolation due to coronavirus.
Fresenius Medical (FME.DE) bounced off the support zone at €55.50 last week and managed to test €60 handle yesterday. The near-term support to watch is €58, where few price reactions occurred in the second half of 2019. Looking above, the key resistance zone ranges between €64 and €65. Note that the upper limit of the zone more or less coincides with the 50% retracement of the February-March drop. Source: xStation5
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