DE30: Adidas and Deutsche Bank put pressure on DAX

• DE30 loses nearly 1.5%

• Adidas cuts forecasts for 2022

• Deutsche Bank lays off bankers in the US and UK

Friday's session on European markets brings a deterioration in sentiment among major stock market benchmarks. The DAX is losing nearly 1.5% amid weak earnings forecasts from Adidas and layoffs of Deutsche Bank investment bankers.

The swaps market is now pricing in a nearly 89% chance of a 75bp rate hike at the ECB's October meeting. Source: Bloomberg

DE30 index chart, D1 interval. The benchmark German blue chips are trading down today and going below yesterday's lows. Source: xStation 5

Friday's German market session brings lower valuations for all sectors of the economy. Source: Bloomberg

News:

• Downward pressure is being applied today by Adidas (ADS.DE), which lowered its earnings forecast. The company argues its decision on the grounds of weak sentiment in China, falling demand in Western markets and one-time costs associated with the exit from Russia. Operating margin is expected to be 4% versus 7% previously expected. The weak sentiment is spreading to companies in the same industry. Puma (PUM.DE) shares are losing nearly 7%. Adidas is losing more than 10%.

• Deutsche Bank (DBK.DE) is cutting investment banking jobs at its subsidiaries in the UK and the US.The bank's shares are losing nearly 2.5%.

Recommendations:

• The target price for Adidas (ADS.DE) shares has been lowered to €105 (Cowen and Company), €121 (Societe Generale) and €130 (Telsey Advisory Group).

The largest percentage changes of companies included in the DAX index. Source: Bloomberg

The most active stocks in the DAX index (DE30). Source: Bloomberg