market report
The DAX bulls have failed miserably with their latest attempt at stabilization. The DAX suffered a price collapse on German Unity Day – and is now approaching the 15,000 point mark.
Investors who did not follow what was happening on the stock markets on German Unity Day may be rubbing their eyes in amazement: nothing remains of the attempt to stabilize the DAX above 15,400 points that was initiated at the beginning of the week. Instead, prices fell by 1.1 percent to 15,085 points yesterday.
Further losses are now becoming apparent towards the middle of the week. The broker IG currently estimates the German leading index 0.2 percent lower at 15,050 points. That would be another low since March. “Interest rates remain the big spoilsport for the stock markets,” explained portfolio manager Thomas Altmann from QC Partners. “With a 20-year term, the 5 is now in front of the decimal point for US government bonds. In this country, 3.2 percent for 20-year bonds means a new 12-year high.”
Added to this are risk factors: exceptionally high oil prices and the strong US dollar. It was only on Monday evening that several monetary authorities at the US Federal Reserve (Fed) dashed investors’ hopes of imminent interest rate cuts.
“These three factors – expensive oil, high yields and a strong greenback – are essentially taking the air out of the financial markets,” summed up Samy Chaar, chief economist at the Swiss banking group Lombard Odier in Geneva.
Against this background, investors on Wall Street also ran away from stocks yesterday: the Dow Jones index of standard stocks closed 1.3 percent lower at 33,002 points. The technology-heavy Nasdaq fell 1.9 percent to 13,059 points. The broad S&P 500 lost 1.4 percent to 4,229 points.
The negative statements from Wall Street also pulled the Japanese stock exchanges into the red this morning. The leading Nikkei index, which includes 225 stocks, was trading 1.5 percent lower shortly before the close of trading in Tokyo. Markets in mainland China are closed until the end of this week due to the Golden Week holiday.
An additional stress factor is the open power struggle in the US House of Representatives. The fall of the previous chairman, Kevin McCarthy, is blocking, among other things, the already difficult and time-critical negotiations with the Senate on a final budget.
The dollar continues to show strength in Asian foreign exchange trading. At the same time, the euro continues to fall to $1.0458 – the European common currency has not been this low since December.
The strong dollar and rising interest rate expectations continue to cause problems for the gold price. In the morning, the troy ounce of gold was trading at $1,822, after falling to $1,815 the day before, its lowest level since March.
Among the individual stocks in the DAX, VW shares will come into focus in the morning. The VW brand recorded a 1.2 percent decline in US sales in the third quarter to 87,756 vehicles. The VW subsidiary Audi, on the other hand, was able to increase its deliveries by 21 percent.
The US airline United Airlines has ordered additional aircraft from the manufacturers Airbus and Boeing. The Europeans are to deliver 60 additional A321neo. The airline has exercised an option to purchase 50 787-9s from Boeing. United has also secured new options for up to 50 more 787s and purchase rights for 40 more A321neos by the end of the decade.
The ailing Scandinavian airline SAS has secured a cash injection from its Franco-Dutch rival Air France-KLM and the financial investor Castlelake. The consortium, which also includes the investment company Lind Invest and the Danish state, is providing almost $1.18 billion for new shares, new debt and the repayment of old liabilities.
Intel wants to take another division public as part of its ongoing corporate restructuring. According to the automotive supplier Mobileye, this time it is the business with programmable special chips that are used, for example, in communications technology or the infrastructure of data centers. The Programmable Solutions Group (PSG) will initially be managed as a separate business unit and will be listed on the stock exchange in the next two to three years.
According to Apple boss Tim Cook, the negative consequences of global warming also pose major challenges for companies. “There is probably no bigger crisis than climate change,” said Cook in an interview with the German Press Agency in Thisted in the Danish region of Nordjylland. The US group operates a solar park there together with a Danish partner, from which Apple’s European data center in Viborg is supplied with electricity.