market report
Because of the worsening situation in the Middle East and the US labor market report, investors prefer to hold back a little. Nevertheless, the DAX turned positive in the first few minutes of trading.
The DAX faces a battle for the 19,000 point mark at the end of the week. In view of the upcoming US labor market report and the continued tense situation in the Middle East, investors on the stock market remain cautious.
“Markets are holding steady, but the geopolitical landscape is simmering,” writes Stephen Innes of SPI Asset Management. “There is a storm brewing beneath this seemingly calm surface. Everyone knows that the next step could shake things up dramatically,” said the market observer, referring to a feared Israeli reaction to the Iranian missile attack.
At the start of trading, the DAX slipped by almost 0.2 percent to 18,980 points. He initially continued his losing streak and fell below the 19,000 point mark, which he had broken for the first time a good two weeks ago. In the first few minutes, the leading German index regained control and even turned slightly positive. Nevertheless, there are signs of a weekly decline of more than two percent. A week ago, the stock market barometer reached a record high of almost 19,492 points.
The focus today is on the US government’s labor market report for September. Experts polled by Reuters expect 135,000 jobs to have been created. That would be fewer than 142,000 in August. The unemployment rate is expected to remain at 4.2 percent afterwards. The development of the labor market in the USA plays a particularly important role in monetary policy. “Today’s labor market report will have a significant impact on the decision as to whether the monetary authorities will cut by another 50 basis points or immediately move to the 25 rate,” predicts Thomas Altmann from QC Partners.
The US Federal Reserve recently lowered interest rates and is likely to follow up with further easing measures. The monetary authorities stated that although employment growth had slowed, the unemployment rate was still low. Expert Innes is positive about the fact that the US economy continues to demonstrate its resilience. But this coin has a downside: “In view of such good economic development, the US Federal Reserve may not have convincing arguments for a massive interest rate cut in November.”
The threat of a worsening of the Middle East crisis has also unsettled investors on Wall Street. Trading was very nervous in the first few hours yesterday. Later, things calmed down a bit. At the close of trading, the technology-heavy Nasdaq 100 almost made up for its losses at 19,793 points, down 0.05 percent. The leading index Dow Jones Industrial ended trading 0.44 percent weaker at 42,012 points. The market-wide S&P 500 fell by 0.17 percent to 5,700 points.
Strong US economic data and the associated hope for a soft landing for the American economy could not have a lasting positive impact on prices. The mood in the service sector in the United States had brightened significantly. However, this also fueled some fears that interest rates could fall more slowly than previously thought.
Meanwhile, the most important stock exchanges in the Far East have not developed a clear direction today. Market players remained cautious and monitored developments in the Middle East. In addition, many investors remained on the sidelines ahead of the eagerly awaited monthly US labor market report later in the day, it was said. Tokyo’s Nikkei 225 closed 0.2 percent higher at 38,636 points. In the Hong Kong Special Administrative Region, the Hang Seng Index recovered from its clear loss the previous day and recently gained 2.1 percent to 22,580 points. The stock exchanges in mainland China remained closed again due to the holiday.
The exchange rate of the euro has changed little before the important US economic data. In the morning, the common currency was trading at $1.1032, around the same rate as the previous evening.
After the recent sharp rise in oil prices, investors in the raw materials market tended to hold back at the end of the week. North Sea oil Brent and US oil WTI are trading little changed at $77.53 and $73.65 per barrel, respectively. Fears of a major conflict in the Middle East that could disrupt crude oil deliveries have caused prices to rise by around eight percent this week driven upwards.
Today, companies are focusing on car manufacturers. The shares could be moved by possible punitive tariffs from the EU against Chinese electric cars and the feared countermeasures from China. The vote in Brussels is expected late this morning. Germany is against the tariffs, and the German automotive industry sees more disadvantages than advantages from the measure.
Springer Nature’s IPO also took place in the morning – and the Berlin scientific publisher made a successful debut. The first price of the shares was recorded on the Frankfurt Stock Exchange at 24 euros. That is 6.7 percent more than the price of 22.50 euros at which the papers were issued. Springer Nature is only the third major IPO in Germany this year. At the beginning of the year, the tank gear manufacturer Renk and the perfumery chain Douglas made it onto the stock market. The issue brought Springer Nature 600 million euros, 400 million of which went to the financial investor BC Partners, which reduced its stake from 47 to 36 percent.
The new BASF boss Markus Kamieth has promised billions in investments in maintaining and expanding the Ludwigshafen site. “78 percent of the systems are future-proof. I find that impressive,” he told the Handelsblatt. The chemical company, which is suffering from the weak global economy, will invest billions in the maintenance, modernization and expansion of the main plant over the next few years. At the same time, however, further savings are necessary. In Ludwigshafen, costs should therefore fall by 1.1 billion euros by 2026. That is almost half of the global savings volume of 2.1 billion euros.
The online pharmacy Redcare Pharmacy expects a lower profit in 2024 than before due to higher advertising expenditure for the e-prescription. Management now expects the margin based on adjusted earnings before interest, taxes, depreciation and amortization (Ebitda) to be between 1.2 and 2.2 percent in the current year, as the Dutch group listed in the MDAX announced. The company had previously forecast a margin of 2 to 4 percent. Redcare is represented in Germany primarily with the Shop Apotheke brand.