market report
After the significant setback from the previous day, DAX buyers now have to mobilize all their strength to stabilize the leading German index. Because good reasons to buy stocks now of all times are rare.
The DAX could start trading in the middle of the week with a small premium. The broker IG currently values German standard values 0.1 percent higher at 17,782 points. The day before, the German stock market barometer had lost 1.4 percent to 17,766 points.
“The swansong for the stock market rally has begun because investors are afraid of an interest rate shock if inflation rates rise dramatically again due to rising oil prices,” explains Konstantin Oldenburger from CMC Markets.
Yesterday the DAX broke through its recent lows of 17,865/17,861 points and fell to a monthly low of 17,714 points. The focus of technically oriented investors is now the 50-day line, which is currently just under 17,700 points. From the perspective of the DAX bulls, this must be defended in order to avoid a negative course in the medium term.
The fundamental background to the correction that has been underway since Easter is the geopolitical situation in the Middle East and the increased uncertainty surrounding interest rate developments in the United States. Just yesterday, Fed Chairman Jerome Powell once again put a damper on investors’ interest rate cut fantasies.
In view of the situation on the inflation front and the still strong labor market, it is currently appropriate to let the tight monetary policy continue to have an effect, said Federal Reserve Chairman Powell in Washington.
Traders on the US futures markets now see only reduced prospects that the Fed will dare to lower interest rates more than once this year. A change in monetary policy is not expected on the financial markets until September at the earliest.
Naturally, the Fed Chairman’s statements did not cause a storm of enthusiasm on Wall Street, but the strong financial results of major US banks and other important companies proved to be an important share price support.
The Dow Jones index of standard stocks closed yesterday 0.2 percent higher at 37,798 points. The technology-heavy Nasdaq, on the other hand, fell 0.1 percent to 15,865 points. The broad S&P 500 lost 0.2 percent to 5,051 jobs.
The markets in Asia did not find a common direction this morning. In Tokyo, the 225-value Nikkei index was 0.5 percent lower at 38,286 points in late trading. In contrast, the Shanghai stock exchange is currently up 1.1 percent.
In Asian forex trading, the euro is trending sideways at $1.0624. There is also little movement on the gold market: a troy ounce of gold costs $2,381 this morning, which is about the same as the evening before.
Oil prices, on the other hand, will have to give up some of their recent gains. A barrel (159 liters) of North Sea Brent costs $89.57 in early trading, which corresponds to a loss of 0.5 percent. Fears of escalation in the Middle East had recently driven up risk premiums on the oil market.
Adidas shares in the DAX are probably worth a look today. After a surprisingly good start to the year, the sporting goods manufacturer is becoming more optimistic for 2024. Sales this year should grow by a mid to high single-digit percentage after adjusting for currency effects, the company announced yesterday after the stock market closed. The Swiss are now expecting operating profit of 700 million euros. However, the new forecast is still well below the expectations of some analysts.
The car supplier and tire manufacturer Continental once again felt the effects of problems in car supply in the first quarter. In ongoing business, the Hanoverians are once again in the red with their problem child, as they surprisingly announced yesterday after the stock market closed based on preliminary figures. Before interest, taxes and adjusted for special effects, Conti made a loss of around 4.30 euros for every 100 euros in sales from car supplies. Analysts had expected a difficult start to the year, but not on this scale.
The German airline Lufthansa had the most flights canceled across Europe in the first quarter of this year. The airline canceled 5.99 percent of its flights in the first three months of the year, and 2.97 percent in the same period in 2023, as the legal service provider Flightright announced. Overall, Germany performed poorly in the ranking. The reason for this is the repeated strikes in the first quarter.
In the SDAX, Borussia Dortmund shares are likely to rise at the start of trading today. After Success against Atlético Madrid last night Borussia will reach the semi-finals of the Champions League for the first time in eleven years and can even dream of another showdown at Wembley.