DE40: Extension of declines on European stock exchanges 📉

• European indices extend declines
• ASML, Adidas, and Daimler Truck results in the background
• Attention turns to U.S. housing and industrial data

Overall market situation:

Wednesday's session on European stock markets is marked by continued declines in the indices. The German DAX is currently down 0.4%, the French CAC40 nearly 0.23%, and the British FTSE100 over 0.16%. Investors are reacting today to the preliminary results of Adidas and Daimler Truck. Weak results from ASML are causing a sell-off in the semiconductor market. Investors' attention will turn today to data on new home construction and industrial production in the U.S.

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

The German benchmark DE40 is trading nearly 0.7% lower during Wednesday's session. The index negated an attempt to break above the 18,840-point zone and is currently trading at its lowest levels since July 11. Maintaining the downward trend in the longer term has led to a test of the historically significant control level in the 100-day exponential moving average zone (purple curve on the chart, it remains a key support point). Locally, the most important resistance, after breaking through the 50-day EMA (blue curve) and the peak zone from July 5 (combined with the peak from April 2 this year), is currently the historical peak at 19,000 points. Source: xStation

News:

Roche (ROG.CH) announced that its experimental obesity drug yielded positive results in an early stage of clinical trials, making the Swiss drugmaker a late contender in the race to develop obesity drugs. The once-daily pill CT-996 resulted in a placebo-adjusted average weight loss of 6.1% within four weeks in obese patients without diabetes. The company's shares are currently up 6.25%. Shares of competitor Novo Nordisk (NOVOB.DK) are currently down 4.2%.

Shares of Daimler Truck (DTG.DE) are currently down 2.3% after the company delivered second-quarter results below expectations, announced an impairment of its China joint venture, and put its full-year guidance under review.

PRELIMINARY SECOND-QUARTER RESULTS

• Preliminary adjusted EBIT 1.17 billion EUR, estimated 1.22 billion EUR
• Preliminary adjusted EBIT for Trucks North America 875 million EUR, estimated 761.6 million EUR
• Preliminary adjusted EBIT for Mercedes-Benz 299 million EUR, estimated 397 million EUR
• Preliminary adjusted EBIT loss for Trucks Asia 82 million EUR, estimated profit 49.3 million EUR

Shares of Adidas (ADS.DE) are up over 3.5% today after the well-known sports company published better-than-expected preliminary quarterly results and raised its full-year guidance. The results were particularly driven by the popularity of the terrace Originals franchise, as well as weak sales from Nike for models Air Force 1 and Air Jordan 1.

YEAR FORECAST

Expected operating profit around 1.0 billion EUR, previously expected around 700 million EUR, analysts estimated 1.06 billion EUR

Expected revenue growth in constant currency at a high single-digit rate, previously expected growth at a mid- to high single-digit rate

PRELIMINARY SECOND-QUARTER RESULTS

• Preliminary gross margin 50.8%, analysts estimated 51.4%
• Preliminary revenue 5.82 billion EUR, analysts estimated 5.56 billion EUR

Analyst actions:

• Adidas AG: Bernstein raises target price to 207 EUR from 204 EUR
• Adidas AG: Deutsche Bank raises target price to 265 EUR from 255 EUR
• Adidas AG: JP Morgan raises target price to 260 EUR from 250 EUR
• Adidas AG: Telsey Advisory Group raises target price to 285 EUR from 245 EUR
• Adidas AG: Telsey Advisory Group raises to outperform from market perform
• Adidas AG: Wedbush raises target price to 248 EUR from 233 EUR

Other news from individual DAX companies. Source: Bloomberg Financial LP