market report
The tense situation in the Middle East and rising bond yields make stocks appear unattractive at the moment. The DAX is also likely to start the trading day today with a discount.
According to banks and brokers, the DAX is likely to start trading lower again today. The German stock index is hit, says Konstantin Oldenburger, market analyst at CMC Markets.
Yesterday the DAX slipped below the round mark of 15,000 points for the first time since the beginning of October. At the close of trading it was slightly higher again at 15,045.23 points, down 0.3 percent. The war between Hamas and Israel continues to weigh on sentiment. Diplomatic efforts continue, but so do military conflicts.
“The situation in the Middle East remains tense and therefore risk aversion continues to be elevated,” write the Helaba experts in their daily commentary. However, there were no dramatic increases in oil prices, which is why negative influences on the global economy were sometimes limited.
The ongoing rise in yields on the bond markets is also causing the stock markets to become less attractive. Overnight, the yield on ten-year US bonds rose to five percent. This is driving up borrowing costs worldwide.
Bonds are currently becoming more and more an alternative to stocks, especially as “the fear of an escalation of the conflict in the Middle East with far-reaching consequences for energy supplies” is driving investors to safe havens, noted capital market strategist Jürgen Molnar from the Robomarkets trading company. This is also reflected in the strength of the gold price.
The interest rate policy of the central banks also remains an important factor for investors. The fact that US Federal Reserve Chairman Jerome Powell signaled another interest rate break yesterday could have a positive impact today. However, Powell also leaves the door wide open for future tightening. He said that patience was now required to see what effect the rapid interest rate increases that had taken place since the beginning of last year had. The Federal Reserve will therefore proceed cautiously.
This is seen as a signal that no increase is to be expected when the interest rate decision is made on November 1st, especially since other leading monetary authorities have previously indicated something similar. However, further tightening of monetary policy may be necessary under certain conditions, emphasized Powell. The Fed will make this dependent on the data situation.
In the USA, the leading index Dow Jones Industrial fell by 0.8 percent to 33,414.17 points despite Powell’s statements. The market-wide S&P 500 lost 0.9 percent to 4,278.00 points. The Nasdaq 100 index, which is predominantly made up of technology stocks, also lost 0.9 percent to 14,783.13 points.
Stock markets in Asia hit a new 11-month low today on rising fears over the Middle East conflict and a rise in long-term US yields. The Nikkei index, which includes 225 stocks, was 0.3 percent lower at 31,332 points. The broader Topix index fell 0.4 percent to 2,256 points.
The Shanghai stock exchange was down 0.4 percent. The index of major companies in Shanghai and Shenzhen lost 0.4 percent.
The delivery platform Lieferando is expanding its business beyond restaurant deliveries. In the future, users will be able to have more technology products delivered from Saturn and Mediamarkt branches via Lieferando channels, Lieferando announced. The brand, which belongs to the Dutch group Just Eat Takeaway, is perpetuating and expanding an existing collaboration with the retail chain. The Lieferando drivers have been delivering smaller products for short-term needs within the Berlin S-Bahn ring since May.
The US pharmaceutical company Pfizer is allowed to take over the US biotech company Seagen. The EU Commission concluded that there were no competition concerns and approved the takeover without any conditions, the Brussels authority announced. In March, Pfizer announced that it would pay $229 per share for the cancer specialist. Seagen is valued at $43 billion.