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European markets drop
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DE30 drops to 13,150 pts
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Lufthansa may cut 1,000 pilot jobs in 2021
European markets are trading significantly lower on the final trading session of the week. DAX as well as other indices from the Western Europe trade around 1% lower at press time. Spanish IBEX (SPA35) is a top loser as it drops around 1.8%. Ursula von der Leyen told EU leaders that no-deal Brexit looks like a base case scenario now. Apart from that, gridlock over the US economic relief continues and it may add to sour moods.
Source: xStation5
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Open real account TRY DEMO Download mobile app Download mobile appDE30 has dropped to the lowest level since late-November. German index broke below the upward trendline at the beginning of the European cash session and downward move has accelerated. If bulls fail to defend the support zone at 13,150 pts, the technical picture will worsen. The next major support zone ranges between 12,900 pts handle and 23.6% retracement of an upward move started at the end of October. Note that as we move closer to the year's end, no-deal Brexit is becoming more and more likely and markets may continue to price risk associated with it. Current decision deadline is set for Sunday but it cannot be ruled out that the EU and UK will decide to continue talks beyond it.
Company News
Lufthansa (LHA.DE) may be forced to cut 1,000 pilot jobs in the second quarter of 2021. This will include 500 captains and 500 first officers. Jobs cuts can still be avoided but trade unions would need to agree on reduced hours. On a positive note, the airline said that bookings for the 2021 holiday period tripled since first positive coronavirus news was announced. Lufthansa expects 2021 profit to be roughly half of what it has earned in 2019.
European Commission cleared the joint venture of Allianz (ALV.DE) and General Electric as well as the joint venture of Deutsche Telekom (DTE.DE) and SK telecom.
Analysts' actions:
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E.ON (EOAN.DE) downgraded to "underweight" at Morgan Stanley. Price target set at €9
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HelloFresh (HFG.DE) upgraded to "neutral" at JPMorgan. Price target set at €55
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Fraport (FRA.DE0 upgraded to "hold" at Bankhaus Metzler. Price target set at €48
DAX members at 10:30 am GMT. Source: Bloomberg
