market report
Disappointed interest rate fantasies and economic concerns are likely to ensure that the DAX starts trading without momentum on Friday. Wall Street’s guidelines are also uninspiring.
The German stock market is also likely to have a difficult time at the end of the week. Before the Xetra launch, the broker IG estimates the DAX to be down 0.07 percent to 16,952 points. Yesterday the DAX closed with a gain of 0.3 percent to 16,963.83 points. Tuesday’s record high of around 17,050 points remains within reach.
“The 17,000 mark is proving to be a tough one for the German stock index. Currently, neither good quarterly figures nor interest rate cut fantasies allow the index to jump high enough over this bar without breaking it again in the end,” explained analyst Konstantin Oldenburger from CMC Markets.
“As long as the DAX does not manage to establish itself above 17,000 points, the risks of correction are increased,” wrote Helaba market observers in their daily commentary.
Concerns about deflation and the threat of an economic slowdown in China are currently weighing on sentiment. After all, China is of great importance for the global economy, so investors fear that China’s weakness will also have a negative impact on its trading partners.
In addition, investors’ hopes of lowering interest rates received another setback yesterday: the number of initial applications for US unemployment benefits fell surprisingly sharply yesterday. This fueled concerns about the future monetary policy of the US Federal Reserve, which is trying to curb inflation and cool down the hot labor market with higher interest rates.
“Recent numbers overall point to a resilient labor market,” said Jason Pride, chief strategist at asset manager Glenmede. Even the recent strong economic reports do not give the Fed any reason to cut interest rates in order not to hurt the economy too much if inflation is still improving did not reach its target value of two percent.
Interest rate fears following the latest US jobs data and ongoing China concerns also slowed down Wall Street yesterday. The Dow Jones index of standard stocks closed 0.1 percent higher at 38,726 points. The technology-heavy Nasdaq advanced 0.2 percent to 15,793 points. The broad S&P 500 gained 0.1 percent to 4,997 points. During trading, it exceeded the 5,000 point mark for the first time.
The Japanese Nikkei index broke through the 37,000 point mark for the first time since 1990 – but was unable to maintain the level. The Nikkei closed with a minimal increase of 0.1 percent to 36,897 points.
In Asia, China’s stock exchanges will be closed for a week starting today for Chinese New Year.
Europe’s largest electronics retail chains Media Markt and Saturn achieved an increase in profits in the important Christmas business. Sales stagnated in the first quarter at around seven billion euros, as the owner of the two chains, the Ceconomy holding company, announced. The adjusted operating profit (EBIT) climbed by 18 percent to 248 million euros in the quarter, the bottom line was a profit of 147 (127) million euros.
The weak demand in North Asia slowed down the French cosmetics group L’Oreal surprisingly significantly in the final quarter. Thanks to otherwise strong demand for make-up and skin care products, sales and profits rose sharply in 2023. Sales climbed by 7.6 percent to almost 41.2 billion euros in 2023. Adjusted for currency effects and the consequences of acquisitions and sales, growth was eleven percent.
The BASF Group sees great potential for artificial intelligence (AI) in the chemical industry. “The question is not whether AI will have a significant impact on industrial companies, but rather how quickly it will happen,” said Chief Digital Officer Dirk Elvermann. “What exactly and how will this happen?” BASF is testing AI with thousands of employees. “Each unit has specific experiences.”