market report
The DAX is stuck below the 16,000 point mark. However, a look at the chart technique fuels hopes that this grueling phase of standstill on the German stock market could soon end.
In the absence of clear impulses from the overseas stock exchanges, the DAX started the trading day with a small premium. The German standard values increase by 0.3 percent to 15,944 points at the XETRA opening.
The DAX is thus continuing its recent sideways movement for the time being. For weeks it has been caught in a trading range between 15,600/15,700 and 16,000 points, most recently stuck below 16,000. However, such phases with low fluctuation margins are regularly followed by periods of increased volatility on the markets, as Jörg Scherer, Head of Technical Analysis at HSBC, emphasizes.
Technically oriented investors then speak of a “volatile impulse”. The so-called “Bollinger Bands”, which had recently contracted more and more, provided an indication of such an imminent price breakout from the narrow trading range in the DAX.
Mixed specifications for DAX trading come from the US stock exchanges. A surprise fall in US inflation to 4.9 percent in April has investors hoping the Fed will pause interest rates. On Wall Street, technology stocks in particular were able to benefit from this in the middle of the week. The tech-heavy Nasdaq advanced one percent to 12,306 points.
The Dow Jones index of standard values, on the other hand, closed 0.1 percent lower at 33,531 points. The broad S&P 500 rose 0.4 percent to 4137 points.
In terms of individual values, Alphabet’s shares stood out positively with a price premium of more than four percent. After the recent hype about the use of artificial intelligence (AI) in the form of “ChatGPT” in the Microsoft search engine Bing, top dog Google is following suit. At its annual I/O developer conference, the group presented a new version of its eponymous search engine, which also uses generative AI to deliver longer texts in response to open questions.
Mixed company balance sheets unsettled investors in Tokyo in the morning. The leading Japanese index, the Nikkei, stagnated at 29,126 points, while the broader Topix index lost 0.1 percent. Concerns about the economy weighed on share prices in China. The Shanghai stock exchange was down 0.2 percent and Hong Kong was down 0.7 percent.
Consumer prices in China fell short of expectations, rising 0.1 percent in April, according to official data, while deflation deepened at the factory gates. This suggests that further stimulus may be needed to boost China’s economic recovery.
Gold prices continue their sideways movement at $2030 in early trade. A troy ounce of the yellow precious metal currently costs just under $2,029. The euro extended its losses, shedding 0.4 percent to $1.0942 in early forex trading.
Numerous corporations opened their books in the DAX, MDAX and SDAX this morning. For example, Deutsche Telekom has brought in the highest quarterly profit in years through the sale of its radio tower business. At 15.4 billion euros, the reported surplus of the DAX group almost quadrupled. “Now our figures show how the Funkturm transaction created value for Deutsche Telekom,” said CEO Tim Höttges.
The continued pressure on the exceptionally high prices for the weed killer glyphosate a year ago makes Bayer a little more cautious for 2023. Group CEO Werner Baumann confirmed the group’s outlook in principle, but now expects “target achievement in the lower corridor of our forecast.” In the first quarter, profit fell by a third to almost 2.2 billion euros.
A weaker business with liquid crystals and semiconductor chemicals and the decline in corona revenues slowed Merck down at the start of the year. The turnover of the Darmstadt-based pharmaceutical and technology company increased only moderately in the first quarter by 1.8 percent to 5.3 billion euros. After taxes, profit fell to 800 million euros, after 884 million a year earlier.
The energy group RWE wants to further expand its investments in the green electricity business. In the first quarter alone, the group increased its green portfolio by 4.9 gigawatts with eight billion euros, the largest German electricity producer said. In the same quarter of the previous year, it was 0.6 billion euros. RWE had already presented preliminary figures for the period from January to the end of March at the end of April.
Allianz dares to buy larger shares again. Germany’s largest insurance group announced a buyback program of up to 1.5 billion euros in the evening. The campaign is scheduled to start at the end of May. The group last started such a large share buyback in 2019, before the corona pandemic.
The MDAX group TAG Immobilien also benefited from rising rental income in the first quarter of 2023. However, higher financing costs in particular put pressure on the result. The operating result (FFO 1) fell by eleven percent year-on-year to EUR 42.6 million. Rising interest rates and inflation are currently making the environment for the heavily credit-financed real estate industry more difficult.
The solar technology manufacturer SMA Solar got off to a good start in the new year thanks to persistently high demand and an improved supply of electronic components. Sales increased in the first quarter by around two thirds to around 367 million euros. The consolidated result improved from EUR 3 million in the same period of the previous year to EUR 51.7 million.
Germany’s largest shipping company, Hapag-Lloyd, is feeling the effects of the weakening economy. Operating profit (EBIT) fell by 60.5 percent to 1.7 billion euros in the first quarter due to lower transport volumes and lower freight rates. After the fabulous record profits of the past few years, the Hamburg shipping company had already prepared its investors for a slump in profits.
Customers’ desire to travel continues to play into the hands of the car rental company Sixt. In the first three months of the current year, sales rose by almost a fifth to 695 million euros year-on-year. Due to increased costs for personnel and investments, the pre-tax profit (Ebt) fell by almost two thirds to 33.3 million euros compared to the same quarter of the previous year.
The steel and industrial group Thyssenkrupp slipped into the red in the second quarter of the financial year. The bottom line was a loss of 223 million euros in the months of January to March. Thyssenkrupp had to write off almost 350 million euros on its steel business. In the previous year there was still a net profit of 565 million euros.
After business losses at the beginning of the year, the semiconductor wafer manufacturer Siltronic is cautious about the rest of the year due to the weakness of the chip markets. Due to the destocking of chip manufacturers and their customers, the market weakness is likely to continue over the next few quarters. In the first quarter, the profit of the MDAX group fell by 36.8 percent to 72.5 million euros.
Truck and train brake manufacturer Knorr-Bremse did slightly better than expected in the first quarter thanks to good demand in Asia and North America. Compared to the previous year, sales increased by 14 percent to 1.91 billion euros. Net profit climbed 5 percent to 132.5 million euros.
The Linux software provider Suse is hardly growing any more and has to significantly lower its forecasts for the current financial year. For the 2022/23 financial year (as of the end of October), Suse now only expects sales growth of around five percent; previously, eleven to 13 percent had been assumed.
The Swiss online pharmacy Zur Rose has changed its name after selling its Swiss business. In future, the company will appear under DocMorris – the name of its German subsidiary. The shareholders have approved the change of name. The shares are now traded on the SIX Swiss Exchange under the ticker symbol “DOCM.S”.
The entertainment giant Walt Disney has increased revenues in the most recent quarter – by 13 percent to $ 21.8 billion, as Disney announced yesterday after the US stock market closed. However, the number of users of the Disney + streaming service fell by two percent to almost 158 million customer accounts. Analysts had expected a slight increase.