DE30: European stocks trim early losses, Bayer shares near 12 year lows

• European indices erase early session declines
• DE30 gains slightly, Bayer (BAYN.DE) near 12-year lows
• Commerzbank (CBK.DE) estimates higher annual net profit
• Lanxess (LNX.DE) leads gains among German stocks

European stock indexes traded lower after a down session in the Asia-Pacific region but managed to climb higher in afternoon trading as Wall Street's opening approached. German DAX futures are up nearly 0.3%, CAC40 futures are up more than 0.4% and FTSE 100 futures are up less than 0.2%. The economic calendar for today is light, and in fact the only significant macro data from Europe today was the final German inflation readings, which came in line with expectations.

Retail sales data from the Eurozone, which fell 2.9% versus an expected 3.1% decline - still decidedly weaker than the 2.1% decline in the last reading.  Markets are now awaiting a speech by Jerome Powell (3:15 pm), who may add some commentary to the recent hawkishness from Fed officials, as well as US wholesale sales data, which will be announced at 4:00 pm. Annual inflation expectations in the eurozone according to an ECB survey rose from 3.5 to 4%, which doesn't seem in any way positive for the central bank given the slowing economy. 

Looking at the chart of DAX (DE30) futures on the D1 interval, we see that the index continues its downward movement and the key limit in the upward scenario seems to be the level of 14,400 points, where we see the 23.6 Fibonacci retracement of the upward wave from last autumn and a key short-term resistance from the SMA50 moving average (orange line). Potentially, a breakout above this level could mean a shake-up of the downward structure and a rally towards 15,700 points where we see the SMA200 (red line) and a bearish formation of the so-called 'death cross' in which the SMA100 average pierces the SMA200 from above, which in a sense is the opposite of the 'golden cross' formation of February 2023.Source: xStation5 

Shares of Deutsche Post and Semens Energy are having a successful session today on the floor of the German stock exchange.and are the strongest among the DAX index today.In the middle of the pile today is Volkswagen, and closing it out are the shares of Zalando and Commerzbank, which are down nearly 2%. Source: Bloomberg Finance LP

News from companies

• Continental (CON.DE) cuts annual sales forecast to between €41 billion and €43 billion vs. €41.6 billion to €44.5 billion previously
• Vonovia (VNA.DE) with negative outlook from Jefferies
• e.ON (EOAN.DE) expects a significant decline in fourth-quarter earnings.
• Morgan Stanley upgrades Heidelberg Materials (HEI.DE) to 'Overweight'
• Bayer (BAYN.DE)'s Q3 EBITDA result negatively disappointed analysts
• Telefonica Deutschland with 'Hold' recommendation at HSBC, target price of €2.35 per share

Chemicals producer Lanxess (LNX.DE) this week cut its expected annual profit forecast for the second time by €100 million, citing weakening demand and the withdrawal of its agricultural customers' inventories. The company conveyed that it will cut its dividend to €0.1 per share for the current year (€1.05 in 2022) and intends to reduce its workforce with the savings it will accumulate. The company expects EBITDA to be between €500 million and €550 million - below the €571 million forecast by Vara analysts. Today Lanxess will publish its financial results after the German session, and it seems that quite a few negative factors have already been priced in by the market and factored into the current valuation, which could create the potential for at least a short-term, contrarian unwinding.

Source: xStation5

Bayer (BAYN.DE) says it will lay off management jobs in the wake of its third-quarter earnings decline. With this, the company intends to speed up decision-making processes. Third-quarter EBITDA fell 31.3% year-on-year to €1.685 billion due to declining profits in the seed technology division. The result was worse than analysts' forecasts of €1.725 billion.

The RSI indicator on the W1 interval fell below 30 points signaling a  historic oversold level for Bayer (BAYN.DE) shares. Source: xStation5