- German DE30 breaks out to highest levels in history
- Failed clinical trials lift Merck shares 12% lower
- Bayer rebounds despite court ruling
Overall market situation:
Wednesday's session on the German stock market brings rallies for the main German benchmark, which has broken out to its highest levels of all time. Investors' attention will focus today on the ADP report and the BoC decision. German factory orders for October fell 3.7% MoM (an increase of 0.2% MoM was expected; previous: 0.2% MoM) On an annualized basis, this is a decline of 7.3% YoY against an expected decline of 3.9% YoY and a previous decline of 4.3% YoY. A drop in anticipation of further interest rate hikes by major central banks is driving stock markets in Europe today.
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European companies traded slightly higher during Wednesday's trading session at the moment. Source: xStation 5
The DE30 is gaining nearly 0.24% during today's session and is trading in the zone of historical highs. Source: xStation 5
News:
Merck (MRK.DE) shares are losing more than 12.3% during today's session. The experimental drug evobrutinib failed in two late trials of patients with relapsing forms of multiple sclerosis.
The company's drug did not show sufficient efficacy in reducing annual relapse rates compared to Aubagio, an oral drug for the disease owned by the Sanofi Corporation (SAN.FR). As a result, the drug failed to meet the main objective of the study, Merck reported.
Source: xStation
Bayer (BAYN.DE) shares rebounded today, gaining more than 2%, even though a U.S. court ordered the company on Tuesday to pay $3.5 million in damages to Pennsylvania resident Kelly Martel, who attributed her non-Hodgkin's lymphoma to the use of the herbicide Roundup. Analysts comment that the amount of damages itself is small, and furthermore, the judge is very likely to reduce the amount. The company itself intends to appeal the verdict (it believes it has a strong case on appeal).
Source: xStation
Analyst recommendations:
* MorphoSys (MOR.DE): Leerink initiated analyst coverage of the company with a "market perform" rating. Target price set at €22.
* Fresenius (FRE.DE): UBS reiterated a "buy" recommendation on the stock. Target price at 34 euros. The bank noted that the pause in dividend payments may be due to the company's desire for greater deleveraging.
* Allianz (ALV.DE): JP Morgan reiterated a "buy" recommendation on the stock. Target price set at €270.
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