CFDs are a leveraged product and can result in losses that exceed deposits. Please ensure you fully understand how CFDs work and what their risks are, and take care to manage your exposure. CFDs are a leveraged product and can result in losses that exceed deposits. Please ensure you fully understand how CFDs work and what their risks are, and take care to manage your exposure.

Deutsche Bank share price: rebound short-lived amid restructuring

The Deutsche Bank share price is in the red despite initial gains, with plans to cut 18,000 jobs bringing a mixed market response.

Deutsche Bank to cut 18,000 jobs

Deutsche Bank has been the big story of the morning, as a new week starts to the news that the struggling German bank will cut a colossal 18,000 jobs in a bid to become profitable once again.

Much of this can be attributed to the shift out of the global equities operations side of their investment banking business, leaving Barclays as the only European bank to challenge US giants such as JP Morgan and Goldman Sachs.

Is the restructuring a good thing for investors?

For investors this brings mixed emotions, for while this cost cutting exercise heightens the chance of future profitability, it also removes one of the most exciting parts of the business. By exiting their global equity business, the bank is shifting away from a sector which has the potential to bring huge profits if things go their way.

Thus, we are moving into a phase which will be transitional, yet hopefully brings an eventual return of steady profitability. Remember that it is not cheap laying off 18,000 staff from the area of the business which has some of the highest wages. This process will not be immediate, and thus the gains we have seen are as much a reflection that the company has a plan rather than the perception that we will see the firm turn around immediately.

With the chief financial officer (CFO) stating that there was ‘significant uncertainty’ over whether the firm will break even in 2020, it is clearly a long-term play. However, with the firm posting losses in four of the last four years of trading, the prospect that they could start to turn things around certainly provides an element of hope.

Deutsche Bank share price shows two sides to the story

While the week is young, the volatility seen today is reflective of the two sides to this story, with the initial positive gap higher being eroded entirely. The weekly chart highlights the recent rally into trendline resistance, set within a clear long-term downtrend. That bearish pattern remains intact for now, with a break through €8.15 required to bring about a bullish outlook for the bank.

On the daily chart, we can see that the price came close to reaching the 76.4% Fibonacci retracement this morning, with recent gains seemingly providing us with an opportunity to look for shorts in a continuation of the long-term downtrend. However, while this trend remains in play, the fact that the bank has a plan in place allows for some form of hope for a more stable share-price in the future.

Could the Deutsche Bank downtrend come to a close?

Certainly, a break through €8.15 would boost hopes that this downtrend is going to come to a close, yet with the stochastic turning lower it looks like we could be due another reversal as accompanied by a momentum breakdown. Given that the most recent stochastic swing low comes alongside the 80 threshold, a break below that would add greater confidence to the bearish trend coming back into play.

This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.

Act on share opportunities today

Go long or short on thousands of international stocks with CFDs.

  • Get full exposure for a comparatively small deposit
  • Trade on spreads from just 0.1%
  • Get greater order book visibility with direct market access

See opportunity on a stock?

Try a risk-free trade in your demo account, and see whether you’re on to something.

  • Log in to your demo
  • Try a risk-free trade
  • See whether your hunch pays off

See opportunity on a stock?

Don’t miss your chance – upgrade to a live account to take advantage.

  • Trade a huge range of popular stocks
  • Analyse and deal seamlessly on fast, intuitive charts
  • See and react to breaking news in-platform

See opportunity on a stock?

Don’t miss your chance. Log in to take advantage while conditions prevail.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Friday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.