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European indices trade lower
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DE30 testes erases post-FOMC jump
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Adidas (ADS.DE) announces buyback programme
European stock markets are moving lower on the final trading day of the week after the post-FOMC boost faded. Dutch AEX (NED25) is the top underperformer, dropping 1.4%. German DAX (DE30) moves 0.8% lower while French CAC (FRA40) and Italian FTSE MIN (ITA40) drop around 0.9%. UK FTSE 100 (UK100) is an exception as they index manages to stay afloat and trades 0.1% higher.
German IFO index for November dropped from 96.5 to 94.7 (exp. 95.4). Current conditions subindex dropped from 99.9 to 96.9 while business outlook subindex came in at 92.6 compared to previous 94.2. In a commentary, IFO economists said that supply bottlenecks and return of virus has made the sentiment within the German economy pessimistic and outlook has deteriorated.
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Source: xStation5
Post-FOMC rally on DE30 was halted after the index reached 61.8% retracement of late-November correction. The resistance zone ranging between this retracement and the 15,800 pts mark has halted upward move at the beginning of this week as well. Index dropped back below the price zone at 50% retracement and 200-hour moving average and is looking towards recent lows in the 15,430 pts area. This zone is marked with 38.2% retracement and the lower limit of market geometry and therefore is a key near-term support. Breaking below could see the downward move accelerate. However, given an approaching holiday period and lack of key market events, a sideways move between 38.2% and 61.8% retracement cannot be ruled out.
Company News
Airbus (AIR.DE) received an order from Dutch-French carrier Air France-KLM for 100 jets. Order is for single-aisle A320 and A321 aircrafts and also includes options for purchase of 60 more jets. Deal is valued at over $10 billion. Apart from that, Airbus is also in talks with Air France-KLM over a freighter deal that would include purchase of 4 A350 freighters and option for an additional 4.
Adidas (ADS.DE) announced that it will buy own shares worth up to €4 billion by 2025. Buybacks will begin in January 2022. Company also said that it will pay out majority of proceeds from the Reebok sale, expected to be finished in Q1 2022. Adidas also plans to pay out 30-50% of net income as dividends during the next 5 years.
According to a Reuters report, Chinese authorities pressured Continental (CON.DE) to stop using components manufactured in factories in Lithuania. China is in a diplomatic row with Lithuania over Taiwan. Continental declined to comment on the content of the report.
According to the Manager Magazin report, Volkswagen (VOW1.DE) may lower its forecast for deliveries in 2020 to as low as 8 million cars as component shortages are expected to continue for longer. Volkswagen expects to deliver 9 million in 2021, after lowering the forecast from previous 9.3 million.
In spite of announcing buyback and generous outlook for dividends, Adidas (ADS.DE) failed to snap a losing streak. Stock is trading near the €250 support zone that marks 16-month lows as well as 50% retracement of post-pandemic recovery move. Breaking below would open the way towards support at €230. Source: xStation5
