DAX before the price crash: Black Monday on the stock exchanges?

market report

Status: 04/25/2022 07:35 a.m

Interest rate and growth concerns are causing investors to flee. The DAX should continue seamlessly from its drastic price losses on Friday. Will Monday once again live up to its bad reputation on the stock exchange?

Worries about rapid interest rate hikes by the US Federal Reserve, which could possibly stall the economy, kept investors in suspense at the beginning of the week. “Concerns about interest rates and the recession are now the biggest risks for investors,” said Bank of America’s Candace Browning.

“Black Monday” in the DAX?

Against this background, the DAX once again threatens to make drastic price losses. The broker IG estimates the 40 German standard values ​​1.6 percent lower at 13,919 points. This means they should seamlessly continue their 2.5 percent slump on Friday.

The leading German index thus seems to want to follow a well-known pattern: A first wave of selling on Friday is often followed by a second after the weekend. The private investors are primarily to blame for this, who – heated up and unsettled by the reports in the media – panic and sell. From a statistical point of view, there is only a good chance of an upward turn again on Tuesday.

In the past there have often been such price slumps on the stock exchange, which started with a “Panic Friday”, continued with a “Black Monday” and finally exhausted itself in a “Turnaround Tuesday”.

Nikkei with price slump

Negative indications for the German stock market come from the overseas stock exchanges. Asian stock markets fell the hardest in two weeks this morning. The Nikkei Index, which comprises 225 stocks, is down 1.8 percent shortly before the close of trading in Tokyo. The Shanghai stock exchange is down 2.7 percent.

Heavy losses in the Dow and on the Nasdaq

The prospect of significant rate hikes by the US Federal Reserve had prompted investors to retreat from Wall Street on Friday. The Dow Jones lost 2.8 percent to 33,811 points. The tech-heavy Nasdaq fell 2.6 percent to 12,839 points and the broad-based S&P 500 fell 2.8 percent to 4,272 points.

Fed Chair Powell had previously announced a 50 basis point rate hike at the next Federal Reserve meeting in early May. Apparently, this caught some market participants off guard. The Powell statements came as no surprise, investors should have priced in the rising interest rates long ago.

US oil price slips below $100 mark

Fear of a slowdown in the global economy also caused investors to avoid risky investments such as oil at the beginning of the week. An additional negative factor is the lockdown in Shanghai, which is also dampening demand for oil.

The price of a barrel of North Sea Brent fell 3.1 percent to $103.34 in early trading. The price of a barrel of the US WTI variety slipped 3.2 percent to $ 98.84.

Investors flee in dollars

The dollar is once again in demand on the currency markets in the morning. Investors are fleeing to the “safe currency haven”, in return the euro falls by 0.3 percent to $1.0774.

Gold still under pressure

On the other hand, the price of gold continues to suffer from rising bond yields. The yellow precious metal itself does not yield any interest and is therefore a “natural loser” in rising interest rate expectations. The price of a troy ounce of the yellow precious metal is 0.8 percent to 1917 dollars.

Backing for Bayer management from Norway

Bayer’s management under CEO Werner Baumann can count on the support of the Norwegian sovereign wealth fund in the debate about the discharge of the board of directors at the annual general meeting on Friday. The fifth-largest shareholder, who recently held just under 2.3 percent of Bayer shares, announced on Sunday that it would vote for the discharge of the Board of Management. The fund, on the other hand, does not want to support the remuneration package for Baumann.

MAN restarts truck production

After a six-week standstill, truck manufacturer MAN is starting production again today. The supply of cable harnesses has improved, and a small part of the workforce can now gradually return from short-time work, said MAN boss Alexander Vlaskamp. “According to current estimates, we could lose more than 20 percent of our annual production. The backlog can hardly be made up,” said Vlaskamp.

Twitter deal with Musk later this week?

Apparently, Twitter is no longer as opposed to the takeover bid by tech billionaire Elon Musk as it was at the beginning. The sides are negotiating and could finalize a deal as early as this week, Bloomberg news agency reported, citing people familiar with the matter. The Wall Street Journal had previously reported on it.

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