DE30: Deutsche Bank is weighing DAX down


US and Asian technology stocks under pressure  
DAX (DE30 on xStation5) plummets towards the lower limit of the upward channel  
Deutsche Bank (DBK.DE) publishes disappointing earnings report  
US equities declined yesterday amid disappointment concerning corporate earnings. Chinese and Australian shares extended gains while Japanese ones underperformed. European benchmarks opened lower as the moods deteriorate.

DAX (DE30) plummets towards the lower limit of the upward channel. Source: xStation5
Taking a look at the DE30 chart one can see that after a huge decline yesterday benchmark closed in the vicinity of 12900 pts support level that was used as the lower bound of the late-2017 consolidation range. As the trade kicked-off today the sell-off continued bringing the German blue chip index below this mark. If the bearish momentum prevails during today’s session the test of the lower limit of the upward trend channel may be on cards. Keep in mind that a notch below this ascending support line lies the 200-session moving average that can also be treated as a key support. If the bulls find solid ground they may attempt to bring benchmark back above 12900 pts mark.

Yesterday’s US session was slightly downbeat as S&P 500 (US500) and technological NASDAQ (US100) posted modest declines while the Dow Jones (US30) rose. It is worth stressing that the Apple Inc. (APPL.US) has published its earnings report yesterday. The company reported revenue at a level of $88.293 bln what was a 1.14% upside surprise against $87.302 bln expected. The EPS also beat forecasts coming out at 3.89 against 3.84 expected. However, investors are concerned as the Iphone sales reached 77.3 mln smartphones, while the consensus expected 80.2 mln. Moving onto the Asian session the benchmarks from China and Australia rose moderately with S&P/ASX 200 (AUS200) closing 0.51% higher and the Hang Seng CE (CHNComp) gaining 0.78%. On the other hand, Japanese Nikkei (JAP225) slid 0.9% amid weakness of the technology stocks.

In Europe major stock markets opened lower after the mixed Asian session. The European shares are poised for the biggest weekly drop since August as the Euro Stoxx 50 (EU50) is setting for the loss of over 2.5% this week. Looking at the individual sector benchmarks one can see that almost all sectors are posting declines with energy shares being the only ones in green. The German coalition talks are nearing the SPD-CDU self-imposed deadline on Sunday. The negotiators communicated that they are quite confident of closing the deal by then however, they are giving themselves two additional days if the outstanding issues arise. Once the deal draft is finished it will be put under the vote by 440k SPD members what can take up to 3 weeks. After the first hour of trade the German DAX (DE30) has slipped 1.05%, the French CAC 40 (FRA40) 0.9%, whilst the UK FTSE 100 (UK100) performed slightly better losing only 0.2%.  

Deutsche Bank (DBK.DE) declines severely after announcing its earnings.

Company News

Deutsche Bank (DBK.DE) is the top underperform amid DAX components today. This can be accounted to the company’s disappointing earnings report. The bank reported worse-than-expected revenues and earnings. The revenue in Q4 reached the level of 5.71 bln euros against the consensus of 5.88 bln euros. The company reported negative EPS ratio at the level of -0.187 against -0.107 expected. Looking at the annual terms it is worth to note that the Deutsche Bank reported third consecutive annual loss. After the first hour of trade Bank’s shares has traded 6% lower.