- European stocks have begun the day inching lower
- Investors await data from the US: CPI inflation and retail sales
- Daimler AG is the worst performing stock as emissions scandal emerges
European equity markets have started the day with modest losses as investors await a package of the data from the largest economy. Moreover, FOMC’s Robert Kaplan is due to speak at the Center for Economic Studies of the Private Sector in Mexico City. Central banker is known as centrist so any shift to the dovish or hawkish tone could be a market moving event. As a reminder, the earnings season kicks off with JPMorgan (JPM.US), Wells Fargo (WFC.US) and Citigroup (C.US) revealing their financial reports for Q2 2017 today.
The DE30 was able to break above its downward trend line and everything could be set up for an attack to a major resistance between 12786 and 12946. Source: xStation5
From the technical point of view the German index broke above its downward trend line and with enough of momentum, an attack on the all time highs can not be ruled out. Buyers are in control, at least for now, as price bounced off demand zones marked in green rectangles. Moreover, long wicks pointing to the downside suggest that more investors that are willing to buy enter the German index. If upward trend line holds, a push higher to the area between 12786 and 12946 could be imminent.
The DE30 is hovering slightly above the flat line while the performance of stocks is divided nearly equally as 14 stocks are rising and 16 ones are declining. Source: Bloomberg
Looking back to the Asian session, there were fairly upbeat moods as all indices managed to end the day higher. The Hang Seng CE (CHNComp) gained more or less 0.4 percent. Moreover, the NIKKEI (JAP225) added a mere 0.09 percent but the Shanghai Composite (CHNComp) inched higher 0.13 percent, while the Australian S&P/ASX200 picked up 0.49 percent.
In Europe the EuroStoxx50 (EU50) is gaining 0.7%, the DE30 is slightly higher 0.01%, the CAC40 (FRA40) is adding a modest 0.10 percent, the FTSE100 (UK100) is losing 0.2 percent, whereas the Italian FTSE MIB (ITA40) is sliding 0.14%.
Daimler (DAI.DE) is by far the worst performing stock within the DE30 in early trading. It stems from the report that an investigation (by German prosecutors) into the company’s diesel-engine emissions controls may involve more than 1 million vehicles according to Sueddeutsche Zeitung. Moreover, South Korea’s environment ministry has launched a probe into some imported Mercedes-Benz Vehicles amid reports about an emissions fraud scandal involving Daimler, according to the Yonhap news agency. Ministry found around 40 types of imported Mercedes-Benz vehicles suspected of carrying the emissions manipulation device and is currently investigating how many cars in question have been sold in South Korea. Daimler AG (DAI.DE) shares lose 0.84 percent trading at 64.61 euros.
On the other side of the spectrum, Volkswagen AG (VOW.DE)is one of the best performers in the early trading on Friday. Automaker’s shares inch higher by 0.49 percent as its cars were the second most popular private vehicles on the Chinese market in June. Moreover, the world’s largest car maker has set a target to sell one million electric cars annually by 2025, with sales in the mainland Chinese market being a key driver of that growth. Volkswagen will begin delivery of its first electric car by 2020 – the same time frame Tesla plans to ship one million vehicles a year.