Above 15,000 points: DAX should stabilize

After the weak start to the week, the DAX is likely to catch up again today at the start of trading and stabilize above the 15,000 point mark. But old problems remain and new ones are added.

Experts anticipate that the DAX will start trading today with premiums. The broker IG valued the German benchmark index before trading began 0.3 percent higher at 15,080 points. Yesterday, the leading German index had lost 0.8 percent to 15,037 points, picking up on its minus of almost two and a half percent from the previous week. Will the downward pressure decrease now?

“From a fundamental point of view, the problems do not stop and the risk factors for the stock market are not decreasing,” said Jochen Stanzl, market analyst at the trading house CMC Markets. The number one topic of conversation on the trading floor, in addition to the impending collapse of the Chinese real estate giant Evergrande, is inflation and the reaction of the central banks to the price increases.

There are other stress factors. Recently, rising bond yields raised the valuation question, it said at Credit Suisse. If returns can be made on bonds, it could encourage investors to pull money away from the stock market. Investors increasingly shied away from risk, according to the analysts. However, the Credit Suisse experts remain optimistic about stocks over the next three to six months.

The rising oil price is also an issue that could slow the economic upturn and thus the stock market as well. The oil alliance Opec + will only increase its daily production by the amount already planned in November, despite the shortage on the world market. The price of the US WTI variety rose at times to its highest level in around seven years, and the North Sea variety Brent also became more expensive.

The specifications from the USA are not exactly inviting for investors looking for orientation: The Dow Jones closed 0.9 percent lower on Monday to 34,002 points. The technology-heavy Nasdaq fell 2.1 percent to 14,255 points, the broad S&P 500 lost 1.3 percent to 4,300 points.

Technology stocks in particular fell. The shares of Apple, Facebook, Microsoft, Alphabet and Amazon fell between 2.1 and 4.9 percent. The failure of its app as well as the Whatsapp and Instagram app also caused problems for tens of thousands of users for Facebook.

In Asia, too, the high oil price is overshadowing equity trading. Vasu Menon, Executive Director of Investment Strategy at OCBC Bank, added that concerns about the development of the ailing real estate group China Evergrande continued. Trading in the company’s shares was suspended on Monday.

The MSCI index for Asia Pacific stocks outside of Japan fell as much as 1.3 percent, recording its third decline in a row. In Japan the Nikkei fell at times by well over two percent.

Germany’s second largest automotive supplier, Continental, is resisting the worsening chip crisis. The problem shouldn’t be over anytime soon, estimates CEO Nikolai Setzer. “We see that these effects will probably continue into the year 2022,” he said. “Many market observers assume that there will only be a clear improvement from 2023, when higher capacities are available from the chip manufacturers.”

The car manufacturers themselves are also desperately looking for electronic parts. Opel, for example, has to suspend its production in Eisenach for several months, VW runs short-time work on a weekly basis, and BMW warns of the long-term consequences of the shortage.

Yesterday, in addition to the platform of the online network, the WhatsApp and Instagram services belonging to the Facebook group also failed. Internet experts suspected an error in the settings for the infrastructure through which users can access Facebook’s resources.

As a result, the services could no longer be found on the network. Facebook itself only spoke of “network problems”. The Facebook share closed with a minus of almost five percent. Even after that, the company was still worth around $ 920 billion on the stock exchange. After the disruption was resolved, the price rose temporarily by 0.55 percent in after-hours trading.

The US Federal Reserve is also attracting attention apart from monetary policy: The American Senator Elizabeth Warren has asked the US Securities and Exchange Commission to investigate the trading activities of high-ranking central bankers. In a letter to the SEC, Democrat Warren also named Fed Vice President Richard Clarida, who, according to media reports, switched from bonds to stocks in February 2020. Good timing: Clarida adjusted its portfolio the day before an important announcement by Fed chairman Jerome Powell. Powell warned of the risks posed by the coronavirus and promised a response from the Fed if necessary.

Reports on Fed officials’ financial activity are likely to raise serious questions about potential conflicts of interest, Warren wrote. If the activities were based on the Fed officials’ knowledge that it was market moving and non-public, it could have been illegal. An SEC spokesman declined to comment.