Market report
Status: 08/19/2021 7:50 a.m.
Investors have lost interest in shares. The latest minutes of the US Federal Reserve raise concerns that the end of the ultra-loose monetary policy may be closer than previously thought.
The DAX should start XETRA trading at a discount. Banks and brokers currently rate the German benchmark index 0.7 percent lower at 15,860 points. Last Friday’s record high of 16,030 points is now a long way off.
Instead, investors are focusing on the old breakout mark at 15,800 points. Should the DAX slide below that, the record high would turn out to be a false signal. That in turn would lead to further price losses.
Wall Street has negative guidelines for DAX trading. The Dow Jones index of standard values closed in the middle of the week 1.1 percent lower at 34,960 points. The broad S&P 500 lost 1.1 percent to 4,400 meters. At the beginning of the week, both indices had set new highs. The Nasdaq technology index fell 0.9 percent to 14,525 points, expanding its losses from the previous day.
The increasing numbers of corona infections and the minutes of the last meeting of the US Federal Reserve proved to be a burden for the markets. Accordingly, the members of the Federal Reserve (Fed) are discussing an imminent throttling of the ultra-easy monetary policy.
Fears of tapering fueled
“The minutes show a Fed that is quite divided on most issues, but admits that we are much closer to the point of tapering,” wrote ING analysts.
“Tapering” is the term used on the stock exchange to describe the shutdown of extensive bond purchases by the central bank. When it comes to tapering, the FED is gradually turning the tap on the markets.
The fears of tapering do not stop at the Asian stock exchanges either. Investors’ attention is now increasingly turning to the annual central bank conference in Jackson Hole next week. The situation in Afghanistan and weak economic data from China are causing additional uncertainty.
The Nikkei index, which comprises 225 values, has lost 0.6 percent to 27,413 points at the hour. The Shanghai stock exchange is also 0.6 percent in the red.
The increasing risk aversion of market participants is also reflected in the foreign exchange market. The “safe haven” US dollar is in demand. In return, the euro fell below the $ 1.17 mark. In the low, only 1.1666 dollars are paid for one euro. This is the lowest level of the European single currency in nine months.
The rising dollar makes the raw materials quoted in dollars more expensive outside the dollar area, which depresses the demand for the precious metal on the world market. In addition, the gold price is suffering from speculation about an end to the ultra-loose monetary policy.
The interest rate turnaround is thus also getting closer. However, higher interest rates weaken the gold price because the precious metal itself does not generate any interest. The price of an ounce of gold fell 0.5 percent this morning to $ 1,779.
The auto supplier Hella is moving into focus on the German stock market. The company from Lippstadt is cautiously confident about the new financial year ahead of the planned takeover by its French industry colleague Faurecia. “The market development continues to be characterized by very high levels of uncertainty,” said Hella boss Rolf Breidenbach.
In the past financial year, the headlight specialist earned 360 million euros, after a loss of 432 million euros had been incurred in the previous year, which was burdened by Corona. With 96 cents per share, there should now be a dividend again.
The US network equipment supplier is benefiting from the home office trend. Sales rose surprisingly strongly in the fourth fiscal quarter by eight percent to 13.1 billion dollars, as the company announced. Cybersecurity and teleconferencing products were particularly popular. Net profit climbed within a year by around 15 percent to three billion dollars or 71 cents per share.
The high demand for gaming equipment such as graphics cards and technology for data centers helped the US chip company Nvidia to have a surprisingly strong second quarter. In the three months to the end of July, the group increased sales year-on-year by 68 percent to a record $ 6.5 billion. The profit even rose by 282 percent to 2.4 billion dollars.