Market report: DAX achieves another record high


market report

As of: May 10, 2024 9:23 a.m

The DAX is aiming higher and higher. Inspired by interest rate hopes, the leading German index rose to a new peak in early trading. It is the second record high in a row.

Even on the last trading day of the week, investors on the German stock market remain in a buying mood. The record high in the DAX of 18,699 points, which was set just yesterday, is history again today: The DAX rose by up to 0.5 percent to 18,773 points in early trading – marking a new all-time high.

The DAX is thus taking the well-known “Sell in May” trading strategy to absurdity. Starting from its closing price on April 30th at 17,932 points, the DAX has already risen by 4.7 percent in May. In the past 20 years, the German stock market barometer has only started May better twice.

By marking a new all-time high, the DAX is also sending one of the best buy signals that technical analysis has to offer. The German leading index is now entering new chart territory – or “uncharted territory”, as experts say.

Because above an all-time high there is naturally no resistance, i.e. price levels at which the sellers gained the upper hand in the past and the DAX turned downwards. Chart technology expert Christian Zoller from ING now sees the next target level for the DAX at 19,000 points.

From a fundamental perspective, it is primarily weak US labor market data that is currently giving the stock markets a boost. The weekly initial applications for unemployment assistance rose surprisingly significantly. This could be another indication of a weakening labor market – and thus an important impetus for the US Federal Reserve to cut interest rates soon. Investors are currently speculating that the Fed will cut interest rates for the first time before the US presidential election in November.

Statements from the British central bank from the previous day, which strengthened hopes that monetary policy will soon be relaxed across Europe, are also creating a good mood among investors.

Great Britain remains in focus at the end of the week, as today’s gross domestic product (GDP) data shows that the British economy grew significantly at the beginning of the year.

In the first quarter, GDP rose by 0.6 percent compared to the previous quarter, exceeding the expectations of economists, who on average had only expected growth of 0.4 percent. GDP fell in both the final quarter of 2023 and the third quarter, meaning the economy went through a so-called technical recession.

Positive guidelines for DAX trading come from Wall Street. The hope of falling interest rates gave the major indices a boost yesterday. The Dow Jones index of standard stocks closed 0.9 percent higher at 39,387 points. The broader S&P 500 gained 0.5 percent to 5,214 points, and the Nasdaq technology exchange index rose 0.3 percent to 16,346 points.

The hope of falling interest rates also made investors on the Asian stock exchanges optimistic at the end of the week. In Japan, the Nikkei index, which includes 225 stocks, closed 0.4 percent higher at 38,229 points. The technology-heavy Hang Seng in China’s Hong Kong Special Administrative Region recently rose by 2.1 percent.

The euro falls slightly in early foreign exchange trading. The European common currency is currently trading at $1.0774. The prospect of falling interest rates is now giving the gold price a boost, as the yellow precious metal itself does not generate any interest: a troy ounce of gold costs just under $2,366 this morning, 0.8 percent more.

Oil prices continue to rise in the morning. The price for a barrel (159 liters) of North Sea Brent rose by 0.8 percent to $84.51. The prospect of stronger demand from China and a decline in US inventories continues to support the oil market.

Allianz could be worth a look among the individual stocks in the DAX today. The group’s motor vehicle insurance company now also has cars repaired with used spare parts. This should be both more environmentally friendly and cheaper. Vehicles between the ages of three and eight years old are suitable for this. The alliance referred to England, the Netherlands and France, where there have been guidelines for promoting reusable parts in vehicle workshops for several years.

Because of an unusual smell on board, a Lufthansa passenger plane carrying almost 340 people flew back to Frankfurt am Main yesterday without a plan. “The reason for this was an unidentifiable electrical smell in the cabin,” the company said in the afternoon. The Boeing 747-8 was on its way to Chicago in the USA.

According to sources, the US aircraft manufacturer Boeing is having to deal with the US securities regulator. The SEC is reviewing the company’s statements about its security policies following an incident involving a machine in January, Bloomberg news agency reported yesterday, citing three people familiar with the matter.

Apple has apologized for a controversial commercial for its new iPad model and says it will refrain from airing it on television. In the clip, musical instruments such as a trumpet and a piano are crushed. Criticism then spread in online networks that the video destroyed tools of creativity.

British Airways parent company IAG posted a surprisingly high operating result in the first quarter thanks to strong travel bookings and price increases. The operating result from January to March was 68 million euros after 9 million in the same period last year. Analysts had only expected 49 million euros.

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