Summary:
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Brexit vote to be held around 15 January
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DAX (DE30 on xStation5) moves lower following higher opening
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Wirecard (WDI.DE) and Ctrip to launch multi-currency Visa cards
Stocks in Europe launched new week higher thanks to upbeat moods seen during the Asian session. Swedish and Polish shares outperformed at the beginning of Monday’s trading while Swiss companies were the biggest laggards. Miners surged in the first minutes of trade while healthcare and food companies took the biggest step back.
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After struggling for a few days in the vicinity of 10400 pts handle the German DE30 (DAX futures underlying) finally jump higher. However, the German benchmark turned lower during the first hour of today’s session. Note that a break below previous swing level would upheld a downtrend structure and cause outlook to remain bearish. On the other hand, resistance zone above 11000 pts mark could be seen as the first target for bulls. Source: xStation5
EEF, the UK manufacturers’ organization, surveyed 242 companies operating in the United Kingdom in November 2018 asking them about their outlook on Brexit. According to the research as much as 76% of surveyed companies hinted that border delays will represent the major risk to their business in case no Brexit deal is agreed on. Apart from that, 62% of respondents said that they aim to boost stockpiles ahead of Brexit day. Meanwhile, a group of 209 lawmakers from various political parties wrote and signed a later to the Prime Minister Theresa May asking her to rule out possibility of no-deal Brexit. The letter, that was also signed by companies like Ford Motors or Airbus, reasoned that disorderly Brexit would put UK jobs at immediate risk and in turn cause “unnecessary” economic damage. Situation will be made much more clear next week when the parliament will hold a vote on the deal. Theresa May said on Sunday that the vote will be scheduled around Tuesday, 15 January.
Major European stock market indices after the first hour of trade:
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DAX (DE30): +0.01%
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FTSE 100 (UK100): -0.08%
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CAC40 (FRA40): -0.05%
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IBEX (SPA35): +0.21%
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FTSE MIB (ITA40): +0.38%
Wirecard (WDI.DE) surges on the back of Ctrip cooperation news. Source: Bloomberg
Company News
Wirecard (WDI.DE) is one of the best performing DAX members at the beginning of the new trading week. The German company partnered with Ctrip, the largest Chinese travel company, and will launch a multi-currency travel cards. Visa cards will be used in the process. Cards will allow users to pay in seven most popular currencies without a need to exchange currency abroad. As Ctrip has around 110 million active monthly users the cooperation definitely holds some profit potential.
Osram (OSR.DE) is one of the German companies that trade lower today. The multinational lighting company was downgraded at Bankhaus Metzler from “hold” to “sell”. The price target was lowered from €33 to €32, implying a 12% decline from the previous week close.
BMW (BMW.DE) underperforms today after the company received a downgrade at JPMorgan. The company’s rating was reduced from “neutral” to “underweight”. One-year price target was set at €75.
