• European indices begin trading with cautiousness 
  • Wall Street gets back to trading after Independence Day
  • BMW experiences the deepest decrease in German registered cars in June compared with its peers

The European bourses have kicked off the day with some cautiousness receiving no support from the Wall Street where there was no session yesterday due to Independence Day. Either way, losses seem to be restricted as of now and larger moves could emerge coming into an end of the session when US traders enter the day. 

link do file download link

The DAX (DE30 on xStation5) could potentially reach the closest demand zone located between 12116 and 12273. The break of an ascending channel as well as a broken trend line on a daily time frame along with long wicks rejecting higher prices suggest that price could achieve the above-mentioned objective. Source: xStation5

The DE30 struggles to make new local highs after it broke below an ascending channel last week. Moreover, the price has broken below its upward trend line on a daily time frame and since then, we have observed long wicks to the upside. From a technical point of view, a further decline could be the most probable outcome. If this scenario unfolds, a demand zone located between 12116 and 12273 could act as a strong resistance pushing the price up again.

link do file download link

The German DE30 trades slightly lower with Adidas being the standout stock in the morning trading. Source: Bloomberg

Looking back to the Asian session, there were fairly upbeat spirits across the board except for the Australian S&P/ASX 200 which was down 0.36%. Although, in this instance, it has to be said that the index had a splendid session yesterday mainly on the back of the RBA’s stance which remained dovish what wasn’t in line with hawkish expectations. 

Elsewhere, the NIKKEI (JAP225) moved up 0.25%, the Shanghai Composite (CHNComp) rose 0.76%, the Hang Seng (HKComp) increased 0.6%. In Europe, investors appear to be exceptionally undecided regarding what to do with their money today. As a result, the DE30 is climbing 0.21%, the CAC40 (FRA40) is rising a mere 0.06%, the FTSE100 (UK100) is picking up 0.3% while both the Eurostoxx50 (EU50) and the Italian FTSE MIB are hovering around the unchanged. 

Company news 

Taking a closer look at specific stocks there is Adidas (ADS.DE) which is the best performing one in early European trading. It possibly stems from the fact that the company was upgraded by HSBC from ’hold’ to ’buy’. Analysts chose to meaningfully raise their price target for the stock and set it at 210 EUR in comparison to 165 EUR previously. The target is ca.14% above the consensus average of 184.83 EUR. In its rational HSBC said that Adidas shares provide the strong revenue outlook, visible margin expansion as well as management credibility. As for yesterday, the firm had 16 ’buy’ calls, 19 ’holds’ and 5 ’sells’. 

On the other side, there are modest declines without a concrete report standing behind them. Nevertheless, it’s worth recalling that poorer performance of RWE (RWE.DE) could come from yesterday’s revelations pertaining to a delay of a start of Gersteinwerk plant to July 7th. Otherwise, BMW (BMW.DE) is performing weaker potentially in the aftermath of the data about German vehicle registrations in June. Having glanced at the chart below one could notice that BMW experienced the greatest decline in registered cars in the prior month compared with its peers. 

link do file download link

BMW experienced the deepest decrease in German registered cars in June in comparison to its peers in a yearly basis. Source: Bloomberg