DE40: ASML targets AI❓German stocks at key support level

European stock indices are recording moderate gains during Monday's trading session. DE40 contracts are up more than 0.45% today, while EU50 is adding 0.34%. On the data front, investors' attention was focused today on industrial production figures, which surprised with a higher-than-expected reading.

German industrial production (month-on-month) rose by 1.3% in July, exceeding the estimated 1.0% and improving from the previous -1.9%, with a revised previous value of -0.1%.

• Industrial production (year-on-year) rose by 1.5%, exceeding the estimated -0.3% and improving from the previous -3.6%, with a revised previous value of -1.8%.

German industrial production data significantly exceeded expectations, theoretically paving the way for a more cautious stance by the European Central Bank (ECB) on monetary policy.

Source: xStation

Current volatility observed on the broader European market. Source: xStation

The German DE40 index is gaining 0.45% during today's session and is once again testing the support zones marked by the 100-day exponential moving average (purple curve on the chart). As long as the DE40 remains above these zones, the overall long-term upward trend remains sustainable. However, a sustained break above the aforementioned 100-day EMA, which previously weakened the medium-term upward trend, may prove crucial for this recovery. The RSI for the last 14 days is trading at levels close to 40 points, which may indicate that the current pullback is still relatively large compared to recent history. Source: xStation

Company news

ASML (ASML.NL), a leading supplier of advanced lithography equipment for the semiconductor industry, plans to become the largest shareholder in French artificial intelligence company Mistral through an investment of approximately €1.3 billion in a financing round totaling €1.7 billion. This strategic collaboration aims not only to secure ASML's technological advantage in the semiconductor market, but also to strengthen European technological sovereignty by reducing dependence on American and Chinese suppliers of AI models. The company's shares are up 1.3% today.

The US Securities and Exchange Commission (SEC) has officially concluded its five-year investigation into the Swedish bank Swedbank (SWEDA.SE) without imposing any sanctions or enforcement actions. The investigation concerned historical disclosure irregularities and insufficient anti-money laundering measures taken by the bank in previous years. The conclusion of this process is seen as a significant step towards restoring the bank's reputation and a sign of positive transformation in terms of regulatory compliance.

However, despite the SEC's decision, two other investigations conducted by the US Department of Justice (DoJ) and the New York State Department of Financial Services (DFS) are still ongoing and continue to generate uncertainty as to the ultimate consequences for Swedbank.

Analysts' activities:

Grade increases:

• Grand City Properties upgraded to "buy" by Jefferies; target price €14.
• Henkel upgraded to "outperform" by BNPP Exane; target price €86.
• Marks & Spencer upgraded to "buy" by Citi; target price 440 pence.
• Sanofi upgraded to "overweight" by Morgan Stanley; target price €100.
• Vonovia upgraded to "buy" by Jefferies; target price €31.50.

Grade reductions:

• Ryanair downgraded to neutral by Goldman; target price €27.50.
• Volvo downgraded to neutral by Goldman; target price SEK 298.

Other corporate news from major German companies:

Source: Bloomberg Financial LP