market report
The DAX continues to keep its sights firmly on its record high from the previous week. Whether the German leading index can set a new record today also depends on important inflation data from the USA.
The DAX is likely to start trading at around 17,000 points – always in sight: the record high of 17,050 points. However, profit-taking on Wall Street is likely to initially dampen investors’ buying mood somewhat. At the moment, the broker IG estimates the German leading index 0.3 percent lower at 16,992 points.
The current record in the DAX is just a week old. Just yesterday, the German stock market barometer had approached it to within a few points; the daily high was 17,043 points. The way up is still clear, as the DAX has sent one of the best buy signals that technical analysis has to offer by setting a new all-time high.
However, what happens next with the DAX and the world stock markets depends largely on the US inflation data due today. It is not for nothing that market observers speak of what is probably the most important stock market event of the week. On average, economists expect US inflation to fall to 2.9 percent in January; in December, inflation was still at 3.4 percent.
“Inflation is expected to move further toward the Fed’s target, and investors are hoping for a sharper decline in inflation, which could be the basis for new records on US stock markets,” said Chris Beauchamp, chief market analyst at IG.
Profit-taking began on Wall Street during trading yesterday. The Dow Jones Index was able to save an increase of 0.3 percent to 38,797 points across the finish line. The broader S&P 500 fell 0.1 percent, but remained above the 5,000 point mark at 5,022 points. The Nasdaq technology exchange closed 0.3 percent lower at 15,943 points.
In Tokyo, the Nikkei rose to a new 34-year high on the Morgan. The weak yen, which is currently approaching the much-noticed mark of 150 yen per dollar, continued to provide a boost. At the close of trading there was an increase of 2.9 percent to 37,964 points. The Chinese financial markets remained closed due to the Lunar New Year, and the mainland stock exchanges will not resume trading until next Monday. Trading will begin again in Hong Kong tomorrow.
The euro is currently showing little movement in Asian foreign exchange trading. The European common currency is trading at $1.0768, roughly the same as the previous day. A troy ounce of gold costs just under $2,021 this morning – an increase of 0.1 percent.
BASF CFO Dirk Elvermann is also hoping for open world markets after Donald Trump’s possible victory in the US presidential election in November: “We need a strong USA, which, due to its importance, has a special responsibility for free trade and the global economy.” The USA is an extremely important market for BASF with more than 100 of its own locations and around 13,000 employees.
Starting tomorrow, former VW boss Martin Winterkorn is expected in court in Braunschweig. The 76-year-old is expected to testify as a witness about the diesel affair, which cost him the executive chair at the Wolfsburg car manufacturer in 2015 a few days after it was exposed. Even in the ninth year after emissions manipulation at Volkswagen became known, the question remains as to who knew what and when.
The wafer manufacturer Siltronic expects a significant decline in earnings before interest and taxes (EBIT) due to persistently weak demand. Sales are likely to stagnate. The Executive Board of the MDAX Group expects delivery volumes to be postponed further into the future. In addition, the amount of depreciation is likely to double.
When it came to individual stocks on Wall Street, Nvidia caused a stir yesterday: The chip manufacturer overtook Amazon in market valuation and is now number four among the most valuable US companies. The euphoria around the topic of artificial intelligence (AI) plays a particularly important role – Nvidia is particularly strong there. Nvidia closed slightly in the plus, Amazon slightly in the red.