DE40: European fashion market under pressure📉

• Germany's DAX makes up some of its recent declines 
• Investors await the release of ADP and ISM data for services from the US
• Fashion market sell-off, Morgan Stanley changes recommendations in chemical sector

General market situation:

Thursday's session on European stock markets brings a pullback on most stock indexes. Germany's DAX is currently one of the better performers, trading up nearly 0.15%. At the same time, France's CAC40 is down 0.67%, mainly due to a sell-off in the fashion sector. The DAX continues to stay close to its all-time highs, nevertheless the dynamic uptrend is waning. Investors' attention turns today to ADP, Challenger and ISM services data from the US. 

Volatility currently observed in the broad European market. Source: xStation 

Germany's benchmark DE40 traded nearly 0.22% higher during Thursday's session, but nevertheless maintained a dynamic uptrend throughout. The index broke above the key resistance level set by the 50-day EMA (blue curve on the chart) and the local peaks of the consolidation zone of the last few sessions. The dynamic breakthrough of these zones theoretically opened the way for further increases towards the historical peaks at 19,000 points. At this point, however, the index has negated the breakthrough of this zone and we are seeing a pullback. It is worth bearing in mind that the scale of the recent rebound is sizable, which may lead investors to book some of the gains. In this aspect, a relatively important support zone may be the previously mentioned 50-day EMA and 100-day EMA (purple curve on the chart). Source: xStation

News:

Investors' attention turns to fashion companies today. The sector is losing heavily today after unconfirmed news that Tiffany & Co, a leading jewelry manufacturer, plans to reduce the size of its flagship store in Shanghai, Ltd. by more than 12,000 square feet, said people familiar with the matter, as sales of luxury brands decline in the world's second-largest economy.

Source: xStation 

Volvo Cars (VOLCARB.SE) is adjusting its core business ambitions for the coming years. Instead of aiming for an absolute revenue target, Volvo Cars' ambition is now to continue growing in the premium car market through 2026, as it has in recent years. The company has communicated that it is aiming for a core EBIT margin of 7-8% for the full year in 2026. Previously, the company had aimed for an EBIT margin of at least 8%.

Morgan Stanley is revising its ratings on companies in the chemical sector. Lanxess (LXS.DE) received a double rating upgrade from Morgan Stanley (to “outperform”) due to reduced investment and lower gas prices. The analysts simultaneously downgraded Air Liquide (AI.FR) to “underweight,” while setting equal weights for BASF (BAS.DE). Wacker Chemie (WCH.DE) was also upgraded to an “overweight” rating. 

Other news coming from individual companies in the DAX index. Source: Bloomberg Financial LP