market report
After the German stock market was able to defy increased interest rate concerns in the USA at the start of the week, the DAX is trading lower today at the start. Experts are now hoping for the upcoming reporting season.
After a lively start to the week, investors on the German stock market are taking it easy today. Yesterday, the DAX closed 0.8 percent higher at 18,318 points thanks to the surprisingly strong increase in production in Germany. Today it started trading with a loss of 0.5 percent to 18,237 points.
Analysts do not rule out that prices will initially remain at a high level until the upcoming season of quarterly balance sheets from the USA provides new impetus. “The news from companies could be exactly what the stock market needs to break away from the exhausting discussion about possible interest rate cuts,” says Konstantin Oldenburger from broker CMC Markets. The encouraging economic data of the past few weeks suggests fewer interest rate cuts by the US Federal Reserve this year, but also suggests a positive profit development for companies.
Nevertheless, according to experts, a setback after the rally of the previous months would not be surprising. The DAX had so far avoided a major correction after last week’s record high. There has still been a profit of almost ten percent since the beginning of the year. Even after the recent price slide, investors apparently do not want to deviate from their favorite trading strategy – despite all the warnings.
Investors on the US stock exchanges were already acting much more cautiously yesterday in view of the subdued interest rate expectations. The leading index Dow Jones barely moved and ended the day virtually unchanged at 38,892 points. The technology-heavy Nasdaq and the market-wide S&P 500 index also ended trading almost unchanged.
The strong employment report in the USA on Friday offered little evidence that Fed Chairman Jerome Powell should urgently start cutting interest rates, say analysts at BMO Capital Markets. Market participants are now eagerly awaiting tomorrow’s US inflation data in order to draw conclusions about the timing of the first interest rate cut.
However, a decline in the US inflation rate is not expected, write Helaba experts. Recently, those Fed representatives who express concerns about excessive inflation and at least partially question the interest rate cuts have increasingly spoken out. “This, together with solid economic data, has resulted in interest rate cut expectations being muted,” it said.
The European Central Bank (ECB) is also expected to provide initial interest rate steps this week. In this context, however, experts point out that the ECB has so far not moved ahead of the US Federal Reserve – so the interest rate turnaround could also be postponed in Europe, although the data clearly suggests cuts. Inflation in the Eurozone in particular recently fell to 2.2 percent, bringing it close to the ECB’s target of 2.0 percent.
The majority of the larger Asian stock exchanges rose today. Except for Japan, however, the increases were limited. Before the start of the US reporting season and the publication of US consumer prices, market participants did not lean too far out of the window. Japanese stocks benefited from yen levies that have helped the country’s export-oriented economy. The Japanese leading index Nikkei-225 closed 1.1 percent higher at 39,773 points.
However, developments in China were mixed. The CSI 300 with the most important stocks on the Chinese mainland stock exchanges recently lost 0.2 percent to 3,530 points. The Hang Seng of the Hong Kong Special Administrative Region was up 0.9 percent at 16,876 points.
The euro was trading stable above the $1.08 mark in the morning. In early trading, the common currency cost $1.0855, about the same as the previous evening. There are only a few foreseeable impulses for the foreign exchange market during the course of the day. No decisive economic data is expected. However, the ECB provides an insight into how banks grant loans. The central bank publishes the results of its recurring “Bank Lending Survey”.
Oil prices initially moved little in early trading. In the morning, a barrel (159 liters) of North Sea Brent for delivery in June cost $90.56. That was 18 cents more than the evening before. The price of a barrel of US West Texas Intermediate (WTI) for delivery in May also rose slightly to $86.56. This means that prices are close to their highest levels since October. They had marked this level after strong increases last week.
When it comes to companies, investors are likely to look at semiconductor stocks today. As “DigiTimes” reports, the US chip company Micron wants to significantly increase the prices for DRAM and SSD chips. According to the newspaper, this involves a gradual price increase of more than 25 percent over the course of the second quarter. In the morning, corresponding industry values rose in this country, such as those of the chip industry supplier Aixtron by almost 1.5 percent.
Roland Busch remains CEO of the technology group Siemens. The supervisory board announced the extension of its contract by five years as of April 1, 2025, as Siemens announced in Munich. In addition, it is planned to extend the mandate of board member Cedrik Neike by five years in June 2025, when the current contract expires. Neike heads the Digital Industries division.
The price rally in Rheinmetall shares shows no end. After the shares of the defense company and automotive supplier reached a record high of 560.60 euros yesterday, they rose this morning by 1.5 percent to 568.80 euros, another historic high. At 574 euros, the price would have doubled since the beginning of the year, and this mark is now within immediate reach. Goldman Sachs recently raised its price target to 606 euros and recommended buying.
Aareal Bank is getting a new boss after being taken over by financial investors. The financial institution announced that CEO Jochen Klösges will leave the Wiesbaden real estate financier at the end of July after three years. The supervisory board and Klösges had “mutually come to the decision” that the bank “should move into the next phase of its development under new management,” the statement said. LBBW board member Christian Ricken will take over the position on August 1st. The former Deutsche Bank manager Ricken has been working for the Stuttgarter Landesbank since 2017, where, among other things, he is responsible for the capital market business.
The major British bank HSBC is selling its Argentina business. The bank said it would sell the business to Argentine financial services provider Grupo Financiero Galicia for $550 million, subject to some price adjustments. The transaction includes HSBC Argentina’s entire banking, wealth management and insurance businesses, as well as $100 million in subordinated debt. The sale will hit pre-tax profits by $1 billion in the first quarter, it said.
According to the Bloomberg news agency, the US financial investor Blackstone is about to take over the skin care company L’Occitane. The French cosmetics company suspended trading of its shares ahead of a possible announcement. According to the Bloomberg report, the US private equity giant could partner with Reinold Geiger, the billionaire owner of L’Occitane. Blackstone is exploring a deal with the cosmetics company but the details are still unclear, a person familiar with the matter told Reuters.
The Austrian oil, gas and chemicals group OMV felt the effects of weaker raw material prices at the start of the year. The average crude oil price realized by OMV fell by 3.4 percent to $79.5 (82.3) per barrel compared to the previous quarter, according to the company’s trading update. There was an even greater decline in the realized natural gas price: it shrank by 18.3 percent to 21.9 (26.8) euros per megawatt hour. Total hydrocarbon production was around 352,000 barrels per day. Compared to the fourth quarter of 2023, this is a decrease of 3.3 percent.
According to a media report, the major bank UBS is examining a swap deal in order to fully incorporate its China business. The Swiss group is proposing to take over the remaining 33 percent of UBS Securities from a state-controlled company and in return sell its entire 51 percent position to Credit Suisse Securities (China), the Bloomberg news agency reported, citing the matter familiar people. UBS is demanding around two billion yuan (around 250.1 million francs) for Credit Suisse’s China unit, including the participation of a local partner.
With a settlement payment, Tesla wants to avert a lawsuit over a death involving its “Autopilot” driving assistance system, almost at the last moment. The trial was scheduled to begin this week in San Jose, California. It was not clear from the published court documents how much the electric car manufacturer plans to pay to the family of the driver involved in the accident. The company requested that the amount be kept secret. The case concerned the death of an Apple employee in March 2018. His Tesla Model