Price losses at the start: DAX in the grip of the bears

In the morning, the bears dominate the development of the DAX. After the recent price slump at the start of trading, investors are primarily concerned with one question: How deep can the German benchmark index go down?

The DAX started the new trading day with losses. At the opening of Xetra, the German standard values ​​lost 0.7 percent to 15,499 points, thus widening their price losses yesterday.

In the first few minutes of trading, it continues down to 15,455 meters before a technical countermovement sets in. The question now hovers over the Frankfurt floor: Where can the German standard values ​​find support?

“Today in the DAX could be groundbreaking,” emphasized the Citi analysts. “From a classic point of view, yesterday’s losses are a bearish signal and the risk of a correction to 15,400 / 300 points and even up to the 14,800 point range has increased noticeably.”

The HSBC analysts around Jörg Scherer are also critical: Should the low of mid-August at 15,622 points be breached, “the price development of the last few weeks would have to be interpreted as a double top with a setback potential of 400 points”.

The DAX bulls could counter this

The bulls definitely have a chance to counter and regain lost ground. From a technical perspective, a clear recapture of the August low at 15,622 points would be the minimum target.

A rapid rise above yesterday’s high for the day at 15,755 meters would even bring the German standard values ​​back on track to the all-time high.

From a fundamental perspective, it is above all the fear of a possibly earlier start of tapering, i.e. the reduction in bond purchases by the US Federal Reserve, that is currently driving the markets. New York Fed President Williams said on the night that the tapering might come sooner rather than later. This put the US futures under considerable pressure. The future on the Dow Jones is currently down 0.4 percent.

“Williams’ remarks were backed up by the publication of a monster number of 10,924 million job vacancies, which suggests that employment in the US is not the problem, it is about getting Americans to take those jobs,” said Jeffrey Halley, Senior Asia Pacific Market Analyst at OANDA Forex Broker.

Focus on Governing Council meeting

In this country too, fears of tapering make up part of the emotional state of investors. After all, the Council of the European Central Bank is on the agenda today.

The further pace of the billion dollar crisis bond purchases is likely to be the dominant topic. Many experts expect that the monetary watchdog around central bank chief Christine Lagarde will promise a slower buying speed for the fourth quarter.

From yesterday’s trading day on Wall Street, there were at best mixed targets for the German stock market, even if the price losses in New York were comparatively limited.

The US standard value index Dow Jones closed on Wednesday 0.2 percent lower to 35,031 points. The technology-heavy Nasdaq was down 0.6 percent to 15,286 points. The broad S&P 500 lost 0.1 percent to 4514 points.

The rapid spread of the particularly contagious Delta variant of the coronavirus made US investors nervous. In addition, they were once again concerned about an imminent change in monetary policy.

The negative forecasts made by some bank analysts also caused uncertainty. The experts at Morgan Stanley had downgraded US stocks to “underweight”. Citigroup, Credit Suisse and Bank of America also urged investors to be a little more cautious about the future outlook for the US stock market. The experts’ thesis is that the ratings are very high.

A combination of slowing global growth and the possible expiry of central bank stimulus measures continued to worry investors in Asia.

The Nikkei index, which comprises 225 values, was 0.6 percent lower at 30,008 points at the close of trading in Tokyo. Investors fared better on the Shanghai Stock Exchange. The leading index there, SSE Composite, closed 0.5 percent higher.

The crude oil market is still completely under the impact of Hurricane “Ida”. Persistently high production losses in the Gulf of Mexico are driving oil prices. The price for a barrel (159 liters) of North Sea Brent rose by 0.2 percent to $ 72.66.

The idle production capacities are also driving up the price of natural gas. At midweek, natural gas was as expensive as it was seven and a half years ago, at $ 5.01 per million BTU. This morning the price of natural gas is largely able to hold on to its strong previous day gains.

The euro is trending sideways at $ 1.1814 in early forex trading. In the further course of trading, the ECB meeting is likely to cause movement in the currency pair.

The troy ounce of gold costs $ 1789 in the morning, 0.1 percent less than the day before. The psychologically significant mark of $ 1,800, which the yellow precious metal broke down at the beginning of the week, is moving further into the distance.

The biggest DAX winner is the Merck share, which is approaching its record high again. The Darmstadt-based pharmaceutical company is more optimistic about the future and is aiming for sales of around 25 billion euros by 2025.

“In all three business sectors Healthcare, Life Science and Electronics, the course is already set for sustainable, profitable growth,” said CEO Belen Garijo on the DAX company’s capital market day. The new sales targets by 2025 are above the current consensus estimate, emphasizes JPMorgan analyst Richard Vosser.

The activist investor Enkraft Capital has joined RWE and is calling for the controversial business relating to lignite to be separated. The “strategic adherence to (…) lignite activities leads to a significant erosion of values,” says a Reuters letter from the investor to RWE boss Markus Krebber. This is difficult to accept for the shareholders.

The US semiconductor manufacturer Intel wants to announce by the end of the year where it will build eight large chip factories on the European mainland by 2030. That said, CEO Pat Gelsinger of the “Frankfurter Allgemeine Zeitung”. There are currently around ten location candidates, including several in Germany. Gelsinger has therefore already met with representatives of the EU Commission and has met Chancellor Angela Merkel twice in the past three days.

The US video game retailer Gamestop posted strong business growth in the second quarter thanks to the recovery from the Corona crisis, but fell short of market expectations. Gamestop reduced the loss from $ 111.3 million to $ 61.6 million. The share fell after hours by more than eight percent.

The electric car manufacturer Tesla wants to enter the energy trading business. Tesla is currently recruiting for energy trading to support its battery and renewable energy projects, according to a job posting posted by the company on LinkedIn. Tesla is already in the photovoltaic business, offering solar tiles. In addition, Tesla is building the largest solar system in the USA. The automaker also wants to market electricity in Texas.

Ex-Microsoft boss Bill Gates’ investment company will control the luxury hotel chain Four Seasons Hotels and Ressorts. Cascade Investments takes over half of the shares of the Saudi prince Alwalid bin Talal in the chain for 2.21 billion dollars. Cascade has acquired 71.3 percent of the hotel shares. The chain is valued at ten billion dollars.