DAX attempting to stabilize: the calm after the crash

Attention, Witches’ Sabbath in the DAX!

The broker IG estimates the 40 German standard values ​​0.1 percent higher at 14,002 points. With the slide below the support at 14,149 points, the technical picture in the DAX has also clouded over significantly, the mentioned mark has now mutated into resistance.

Today, the big expiry day could also cause price movements in the DAX: options on indices and individual shares as well as futures on indices expire on the Eurex futures exchange. After yesterday’s drop in prices, however, there is much to suggest that most futures market participants have already repositioned themselves.

Interest rate fears reignited

The hopes of many investors that the central banks in the USA and the euro zone would be able to take less restrictive action in the future in view of the gradually falling inflation rates were abruptly dashed.

As early as Wednesday evening, Fed Chair Jerome Powell had fueled fears of a prolonged rate hike cycle and a base rate of over 5 percent. “We will stay the course until the job is done,” Powell said, dampening hopes of rate cuts in the second half of 2023.

Lagarde even more pessimistic than Powell

What many experts had previously not thought possible: the President of the European Central Bank, Christine Lagarde, argued even more hawkishly and market-unfriendly than Fed President Jerome Powell after the ECB Council meeting yesterday.

The ECB is far from finished with its rate hikes – that’s the impression that sticks after yesterday’s press conference. From the point of view of Thomas Gitzel, chief economist at VP Bank, a deposit rate of well over three percent cannot be ruled out.

Wall Street is slipping

“Investors are now back in a world in which the monetary policy of the stock exchange has broken off their friendship for the time being,” summarized Konstantin Oldenburger, market analyst at CMC Markets. “After these two monetary policy blows to the neck, the stock market is clearly out of breath and investors are pessimistic about the last trading days of the year.”

Dampened hopes of an end to US interest rate hikes continued to weigh on Wall Street yesterday. The Dow Jones lost 2.3 percent to 33,202 points. The tech-heavy Nasdaq fell 3.2 percent to 10,810 and the broader S&P 500 fell 2.5 percent to 3,895.

Strong price losses also in Japan

The bad indications from the US and European stock exchanges are having an impact on the Asian stock markets. Asian stocks are heading for their worst week in two months. The Nikkei index, which comprises 225 stocks, was 1.9 percent lower at 27,527 points at the close in Tokyo. The Shanghai Stock Exchange was unchanged.

Euro showing strength against the dollar

In Asian foreign exchange trading, the euro is in demand. The European common currency is currently up 0.1 percent to $1.0654. Yesterday, the euro briefly surged as high as $1.0725 following the ECB meeting but failed to sustain those strong gains.

Gold price on a gentle recovery course

Gold prices are recovering somewhat after their recent slide. The troy ounce of gold gained 0.2 percent to $ 1779. The yellow precious metal was clearly under the wheels after the Fed meeting. Rising interest rates make gold less attractive as it does not yield any interest or dividends itself.

VW shareholders should approve Porsche’s IPO

Porsche’s IPO is once again the concern of the shareholders of the parent company Volkswagen at an extraordinary general meeting today. The shareholders are to officially resolve the public trading in some of the non-voting Porsche preferred shares, which has been running since the autumn. The decision on the announced special dividend is also on the agenda.

Teamviewer is leaving Manchester United as its main sponsor

The software provider Teamviewer has taken the loud criticism from investors to heart and negotiated an exit option from the expensive main sponsorship contract with the English football club Manchester United. The companies agreed that Manchester United can buy back the rights to the main shirt sponsorship and look for a new main sponsor.

DWS wants less Deutsche Bank

The fund company DWS wants Deutsche Bank to reduce its stake of almost 80 percent. Our own share price would “benefit if more than 15 percent of our shares were freely tradable,” DWS boss Stefan Hoops told the “Handelsblatt”. “I bring these points to the discussions with our main shareholder, Deutsche Bank.”

Südzucker is ambitious

After the good run this financial year, the Südzucker Group expects profits to continue to rise in the coming year. In the next fiscal year 2023/24, the company expects earnings before interest, taxes, depreciation and amortization (Ebitda) of between 1.0 and 1.2 billion euros. That is more than the EUR 890 to 990 million that was last forecast for this year.

Gas importer VNG gets new capital

The Leipzig gas importer VNG will receive around 850 million euros through an increase in equity. This was decided by the shareholders EnBW, VNG Verwaltungs- und Beteiligungsgesellschaft (VUB) and OEW Energie-Beteiligungs GmbH yesterday at an extraordinary general meeting.

Totalenergies and Aramco plan major investment

The energy groups Totalenergies and Aramco want to build a petrochemical plant in Saudi Arabia with an investment volume equivalent to 10.4 billion euros. The plant is to be operated by a joint venture and will start up in 2027. Both companies want to contribute 3.8 billion euros of their own funds to the project.

Adobe pleased with earnings and forecast

The software house Adobe has pleased investors with a profit and a forecast above expectations. In the past quarter, Adobe announced earnings of $3.60 per share, compared to $3.50 expected. The “Photoshop” provider expects earnings of between $3.65 and $3.70 per share for the current quarter.