market report
Even after the Great Expiration Day, investors on the German stock market remain in a buying mood. The DAX is likely to reach the 18,000 point mark again. But there are also warning signs that urge caution.
Things are likely to look up for the DAX at the start of the new stock market week, not least thanks to good guidance from the Asian stock markets. The broker IG currently estimates the German leading index at 18,000 points, 0.4 percent higher. Is the breather on the German stock market already over? Before the weekend, the DAX closed virtually unchanged at 17,936 points.
During trading, however, the DAX rose to a daily high of 18,038 points and was within one point of its record of 18,039 points set the previous day. This means that there is now a double top in the short-term DAX chart – usually a valid technical sign of a downward turn and thus impending price losses.
In addition: On Friday, futures and options on indices as well as options on individual stocks expired on the Eurex derivatives exchange. The Great Expiry Day takes place four times a year, always on the third Friday in March, June, September and December. In the past it has often been the basis for a trend reversal on the stock markets.
From a fundamental perspective, it is still the boom in artificial intelligence (AI) and the prospect of falling interest rates that are driving share prices. Investors are expecting the first interest rate cuts in the euro area and the USA in June. The new stock market week is all about the central banks, as interest rate decisions are on the agenda in the USA, Great Britain, Japan and Switzerland, among others.
Good guidance for DAX trading is coming from Asia in particular this morning. Thanks to the weak yen, the Nikkei is rising strongly again and is aiming to continue its recent record hunt. At the close of trading in Tokyo, the Japanese stock barometer was 2.7 percent higher at 39,740 points.
The Shanghai stock exchange is currently up 0.6 percent. The background is a positive economic surprise from China. The Beijing government reported a 7 percent year-on-year increase in industrial production in January and February, while retail sales rose 5.5 percent. The data could suggest that recent measures to support the sluggish economy are beginning to bear fruit. However, the weak real estate sector is likely to continue to weigh on the Chinese economy.
In Asian foreign exchange trading, the dollar has hardly changed compared to the most important currencies. The euro is currently trending sideways at $1.0886. Meanwhile, gold started the new stock market week with losses. A troy ounce of gold costs $2,146 this morning, 0.5 percent less. The most recent record high of $2,195 is becoming a little further away again.
There are some changes to the indices on the German stock market at the start of trading today. As of today, the pharmaceutical active ingredient researcher Morphosys and the industrial service provider Bilfinger are again represented in the MDAX for medium-sized companies. On the one hand, the electric drive specialist Vitesco has to be relegated to the SDAX small cap index.
On the other hand, the commercial kitchen equipment supplier Rational has to leave the MDAX and is even leaving the DAX family entirely for the time being after it failed to comply with a criterion from the German Corporate Governance Code, the recommendations for good corporate governance. In the leading index DAX everything remains the same.
In the technology stocks index TecDAX, the biofuel manufacturer Verbio is giving way to Süss Microtec, a supplier to the semiconductor industry. In addition, the radiation and medical technology specialist Eckert & Ziegler takes the place of the telecommunications supplier Adtran Holdings.
This Monday, the decision also took effect to increase the cap for the DAX index family from 10 to 15 percent. The new limit aligns the rule with international standards. As the largest index weight in the DAX, the software company SAP is considered to be the main beneficiary of the new rule.
A newly founded DHL subsidiary is intended to provide an additional range of parcel machines. The Bonn-based logistics company announced the founding of the subsidiary today. The new white machines, of which there are only prototypes so far, are called OneStopBox. 100 of them are to be installed this year, 2,000 next year and several thousand in each of the following years.
A new works council will be elected today at the only European Tesla car factory in Grünheide near Berlin. IG Metall hopes to expand its influence in the committee. The first works council election was in February 2022 – before the factory opened. Since then, many more people have been working in the factory in Grünheide – according to the company, there are currently around 12,500. The US electric car manufacturer has so far opposed a collective agreement.
A few sentences from Apple boss Tim Cook could cost the iPhone company almost half a billion dollars. Apple will settle a class-action lawsuit that has been going on for years by paying $490 million, according to court documents released over the weekend. Cook expressed himself relatively positively about business in China in a conference call after quarterly figures were presented at the beginning of November 2018. Two months later, Apple lowered its sales forecast by up to $9 billion in an unusual move – and specifically referred to the slowdown in its China business. The share price fell and investors went to court.