DE30: DAX below key resistance zone 💡

• European stock markets down at the start of the week
• Bayer shares in focus for investors 
• Julius Baer warns of lower annual profits

General market situation:

The first session of the week on European markets is proceeding in a slightly worse mood. The Dax initiated moderate downward movements in the zone of the psychological barrier of 16,000 points. Volatility this week may be relatively high, due to a number of macro publications scheduled. 

Source: XTB

This morning, investors' attention was additionally drawn to the PPI report. Germany reported a significant drop in producer prices for commercial products in Germany. These prices were 11.0% lower in October 2023 compared to October 2022. The drop is the second most significant year-on-year decline since this survey began in 1949, following a -14.7% change in September 2023 compared to a year earlier.

At the moment, sentiment on individual European companies is mixed. Source: xStation 5

Futures based on the German DE30 are trading nearly 0.37% lower on an intraday basis and are currently on the verge of a key resistance barrier set by the 16,000-point level. A possible breakout above these structures could open the way for further rallies towards the local session highs of late August/early September 2023. On the other hand, the key resistance zone for possible observation is the level of 15,700 points. Source: xStation 5

News:

The key company of today's session on the German trading floor is Bayer (BAYN.DE), whose shares are losing more than 18% following a U.S. court ruling that ordered Bayer to pay more than $1.5 billion in one of its outstanding glyphosate lawsuits. Moreover, Bayer announced that a Phase III study on the effects of asundexian was prematurely canceled in the face of lower-than-expected efficacy. Bayer is the 16th-largest company by capitalization in the DAX index.

The company's shares are currently trading at levels not seen since 2009. Source: xStation

Italian bank stocks did very well in the morning on the back of Moody's upgrade of Italy's credit rating outlook. Today, however, much of the upside has been erased.

Bank Julius Baer (BAER.CH)'s stock price is losing more than 11.5% today as it cut its profit forecast. The Swiss bank said that mainly as a result of increased provisions and a higher tax rate, it expects full-year earnings to be lower than a year ago.

Analyst recommendations:

* Aurubis (NDA.DE): OddoBHF downgraded its recommendation on the stock to a "neutral" rating. Target price set at €81.  According to the analyst covering the company, the current financial year is likely to be a mixed one for the entity. 

* Bayer (BAYN.DE): Morgan Stanley renewed analyst coverage for the company with an "equal-weight" rating. Target price set at €52.

* Bayer (BAYN.DE): Barclays has lowered its target price for the company's shares from €65 per share to €40 per share, following today's announcements.