market report
Despite a through ball from Wall Street, DAX investors will probably remain cautious at the start of the week. The hope of an interest rate pause in the USA had provided a tailwind on the US stock exchanges on Friday.
The broker IG estimates the leading German index a little lower at 16,047 points around one and a half hours before Xetra starts. Supported by the approval of the US debt deal, the leading German index managed to recover significantly at the end of the previous week. The DAX had gained 1.3 percent on Friday to 16,051 points. The index thus passed the significant 16,000 point mark again. From a technical point of view, the focus is now on the small price gap at 16,143 points and the record high at 16,331 points.
However, JPMorgan’s market strategists remain cautious. The unanimous opinion that the worst is over is likely to prove wrong, write the experts around Mislav Matejka in a recent comment. In the past, the consequences of a tighter monetary policy have always become apparent with a certain time lag.
Last Friday, the Dow Jones ended trading up 2.1 percent to 33,762 points. The tech-heavy Nasdaq advanced 1.1 percent to 13,240 points. The broad S&P 500 gained 1.5 percent to 4282 points. The agreement in the debt dispute and the latest US job data had made investors optimistic.
The US unemployment rate rose to 3.7 percent in May from 3.4 percent in April. This fueled new hopes that the US Federal Reserve would pause interest rates. “The market is still resilient, but it’s softening. That’s exactly what the Fed would like to see,” said Art Hogan, market strategist at wealth manager Riley Wealth.
Around a third of market participants are currently assuming a rate hike at the next Fed meeting on June 14, compared to 60 percent at the beginning of last week. In the past few days, there have been increasing signals from the management level of the central bank that point to an interest rate pause at the meeting in mid-June.
Speculations of an interest rate pause are driving Asian markets today. The Nikkei was 1.7 percent higher at 32,046 points and exceeded the 32,000 mark for the first time since July 1990. The broader Topix index rose 1.4 percent to 2,213 points.
“The market was buoyed by Friday’s Wall Street gains, which helped keep money flowing into risky assets in Japan,” said Shigetoshi Kamada of Tachibana Securities. The Shanghai stock exchange was up 0.1 percent. The index of the most important companies in Shanghai and Shenzhen lost 0.4 percent.
The Persil manufacturer Henkel has announced further price increases. Increases in consumer goods are necessary this year, said CEO Carsten Knobel of the “Rheinische Post” (Saturday). Price negotiations with retail chains are not easy. “It can also happen that we no longer deliver individual products if no agreement can be reached.”
The manager referred to commodity and energy prices. For Henkel, these increased by three billion euros in 2021 and 2022. “That put a significant strain on our profit margin, despite all our savings efforts.”
According to insiders, Airbus is about to receive a record order from India. The Indian low-cost airline IndiGo wants to order 500 A320 aircraft from the European aircraft manufacturer, people familiar with the matter said on Sunday. An agreement could be worth around $50 billion at current list prices. However, significant discounts are common in such deals. Airbus declined to comment on it.
Lufthansa boss Carsten Spohr considers discussions about a possible takeover of the Portuguese airline TAP to be premature. The privatization process for TAP by the government in Lisbon has not yet been completed, said Spohr. In addition, the Portuguese government plans not to sell TAP outright in the forthcoming privatization. Instead, the state wants to secure a “strategic participation”.
According to its boss Ralph Dommermuth, the telecommunications group 1&1 wants to meet the long-term requirements of the Federal Network Agency despite a delay in the expansion of its own mobile network. The construction capacities increased, Dommermuth told the “Frankfurter Allgemeine Zeitung”. “If things go as contractually guaranteed by our expansion partners, then we will complete 3,000 locations in each of the next few years.” This would also meet the long-term requirements of the Federal Network Agency. At the turn of the year, the United Internet subsidiary had only completed five instead of 1,000 5G radio masts.