Market report: DAX has its sights set on record highs

market report

As of: December 4th, 2023 7:40 a.m

The chances of a continuation of the rally on the German stock market are good. The DAX is likely to remain on the hunt for records at the beginning of the new stock market week. There is not much left to go to the peak at the end of July.

After the second strongest November in its history, the leading German index remains on track for gains in December. Strong guidance from the US stock exchanges should help the DAX make further progress on its way to the record high of 16,529 points at the end of July. The broker IG currently estimates German standard values ​​0.1 percent higher at 16,418 points.

The DAX would thus surpass its high of 16,399 points on Friday – this could rekindle the upward momentum on the German stock market. In any case, from a technical perspective, the path towards a record high is clear since the leading German index closed its downward price gap from the beginning of August last week.

Tailwind for the DAX is also coming from the New York stock markets, which accelerated again on Friday. The trigger was a speech by US Federal Reserve Chairman Jerome Powell. Investors felt that Powell confirmed their assumption that the Fed would not touch interest rates again in December. They also ignored his warning that it was too early to declare victory over inflation.

The technology-heavy Nasdaq advanced 0.6 percent to 14,305 points. The broad S&P 500 gained 0.6 percent to 4,594 points. It was the highest closing level for the S&P this year. The Dow Jones index of standard stocks closed 0.8 percent higher at 36,245 points. This means it reached its highest level in almost two years and a weekly increase of 2.4 percent. The stock market barometer is now only 1.9 percent or around 700 points short of the record level of 36,952 points achieved at the beginning of 2022.

A completely different picture emerges on the Asian stock markets this morning. The Japanese leading index Nikkei fell to its lowest level in almost three weeks on Monday due to the appreciation of the yen. “It seems like stocks are being dragged along by moves in the currency markets,” said Kazuo Kamitani of Nomura Securities. At the close of trading, the stock market index comprising 225 stocks was 0.6 percent lower at 33,231 points.

In China, the mood was clouded after the postponement of China Evergrande’s liquidation proceedings. At the request of the world’s most indebted real estate developer, the judge postponed the proceedings until January 29th. The Shanghai stock exchange is currently down 0.1 percent.

The price of gold reached a new record high in early Asian trading. It went up to $2,147. Behind this is the hope of investors for US interest rate cuts in the coming year. This makes gold, which itself does not generate interest, more attractive. The weakening of the dollar also benefits gold, making it cheaper for international buyers from non-dollar countries. In the morning the euro was trading at $1.0871.

Buoyed by the prospect that US regulators may soon approve Bitcoin exchange-traded funds, Bitcoin breaks $40,000. The cyber currency rose more than 1.5 percent to $40,085, up $611 from the previous closing price. This means that the world’s largest and best-known cryptocurrency has gained 51.1 percent since its annual low of $26,533 on October 11th, but is still a long way from its record high of $69,000, which was reached in November 2021.

Among the individual stocks in the DAX, VW shares could be worth a look today. According to the electric Bulli ID buzz, Volkswagen wants to convert its entire van fleet to electric from 2028. The large Crafter transporter will start in 2028, VW Commercial Vehicles boss Carsten Intra announced in an interview with the German Press Agency. The other models would then come gradually.

DHL is threatened with a strike by transport workers at an important logistics hub in the USA. As the US union International Brotherhood of Teamsters announced on Sunday, a majority of unionized employees at the Cincinnati/Northern Kentucky International Airport (CVG) gave the green light to the possibility of a work stoppage.

The mobile phone provider Telefónica Deutschland (O2) wants to bring hologram phone calls, in which the person you are talking to can be seen as a three-dimensional image, onto the market in 2026. “The product should be ready for the market in two to three years,” said the company’s head of technology, Malik Rao, to the German Press Agency. “We want to start with corporate customers and, in a second step, also offer it to the mass market.”

The real estate company TAG Immobilien will be included in the Stoxx Europe 600 stock index on December 18th. Other German companies are not affected by the recordings. TAG Immobilien has around 85,000 residential units and is already listed in the MDAX small cap index on the Frankfurt Stock Exchange.

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