market report
The DAX is likely to be on a recovery path at the end of the week. But there is probably little more to it than a backlash to the recent price losses. The German stock market barometer is hit.
The DAX could make up some ground on the last trading day of the week and recapture the 18,000 point mark. The broker IG currently values German standard values 0.6 percent higher at 18,053 points. The day before, the DAX fell to 17,865 points in the wake of Wall Street and ultimately closed 0.8 percent lower at 17,954 points.
With the slide below the old all-time high of 18,039 points, the technical situation in the DAX has deteriorated significantly. The correction that has been underway since Easter now threatens to intensify the downward momentum. Especially since the next holding zone in the DAX can only be identified at 17,700 points. Below that, there is still an open price gap waiting to be closed at 17,200 jobs.
Yesterday, ECB President Christine Lagarde indicated that she would soon initiate the longed-for interest rate turnaround. However, it left open whether the interest rate turnaround in the euro area might be initiated earlier than in the USA.
In fact, in the past the ECB had only gotten ahead of the central bank’s leading wolf, the Fed, when it came to cutting interest rates: in the fall of 2011 under President Jean-Claude Trichet. But this interest rate cut proved to be “fatally flawed” in the midst of the Greek and euro crisis and was therefore withdrawn, explained market expert Robert Rethfeld from Wellenreiter-Invest.
On the futures markets, the probability of the Fed turning interest rates at its meetings in June and July is only estimated at a good 20 and almost 50 percent respectively. Yesterday too, central bank statements made investors on Wall Street nervous. For example, John Williams, head of the New York Fed District, emphasized that the central bank needs to keep an eye on further data.
The requirements from Wall Street are correspondingly cautious: The Dow Jones index of standard stocks closed little changed at 38,459 points. The technology-heavy Nasdaq advanced 1.7 percent to 16,442 points, and the broad S&P 500 gained 0.7 percent to 5,198 points.
In the afternoon, investors’ eyes will be on US banks, as they traditionally open the reporting season. Even before Wall Street opens, JPMorgan, Wells Fargo and Citigroup present their first quarter figures. Now companies have to deliver in order to support the narrative that has recently been circulating on the market, according to which the economy in the USA is doing well and a lack of interest rate cuts can therefore be tolerated.
IG analyst Tony Sycamore, for example, remains optimistic about the outlook for stocks: “At the end of an eventful week, one can summarize: if US economic growth remains robust, inflation is contained and the sell-off in the bond market does not accelerate , the environment for the US stock markets remains favorable even without interest rate cuts from the Fed.”
Slightly positive guidance for DAX trading comes from the Asian stock markets. The Nikkei index, which includes 225 stocks, is 0.3 percent higher in late trading on the Tokyo Stock Exchange. Technology stocks led the move, benefiting from an overnight recovery in US stocks. The Shanghai Stock Exchange gains 0.1 percent.
The different interest rate perspectives in the USA and the Eurozone are now increasingly reflected in the foreign exchange market. The euro continues to fall in the morning to $1.0711. The European common currency is now on track for its February low of $1.0695.
The record rally on the gold market continues unabated. In the morning, up to $2,395 will be paid for a troy ounce of the yellow precious metal – which is more than ever before. Since its low in February at $1,984, the price of gold has risen sharply.
Thyssenkrupp shares are coming into focus on the German stock market. Under the pressure of weak demand, the industrial group wants to streamline its steel division, reduce production capacity and initiate an as yet unquantified workforce reduction. The core of the realignment is a reduction in the capacities installed in the network to around 9 to 9.5 million tonnes of steel per year from the current level of around 11.5 million tonnes.
The Swabian battery manufacturer Varta is deep in crisis. The restructuring agreed with the banks and majority shareholder Michael Tojner just over a year ago is not enough to “return to a profitable growth path” by the end of 2026 as planned, Varta admitted yesterday evening. The concept is therefore now being reviewed.
The latest version of the ChatGPT chatbot for paying customers has significantly more up-to-date knowledge of the world. The fresh AI model “GPT-4-Turbo” was trained with publicly available information until the end of 2023, the developer company OpenAI announced yesterday. Until now it ended in April 2023. OpenAI envisaged that the chatbot would have access to increasingly up-to-date information. Initially his knowledge only lasted until autumn 2021.