market report
The leading German index is likely to start trading at the end of the week with further price losses. Investors fear their rate cut hopes may have been a little premature.
The DAX is likely to move further away from its recent record high today. The broker IG estimates the German leading index 0.3 percent lower to 18,680 points. The upward momentum is at least intact, write Helaba’s market observers in their daily commentary. “However, the market situation has become overbought, which could encourage a temporary respite,” is their assessment.
On Wednesday the DAX reached a high of 18,892 points; yesterday it closed 0.7 percent weaker at 18,738.81 points.
Experts spoke of a consolidation after the recent interest rate rally. In addition, the US Federal Reserve indicated that interest rates may have to remain high for longer, even if inflation shows the first signs of easing. The prospect of interest rate cuts is the key price driver of the recent rally.
The ECB’s future monetary policy also remains uncertain: ECB Director Isabel Schnabel has expressed caution about possible interest rate cuts after June. Depending on the data, a rate cut in June could be appropriate, she told the Japanese newspaper Nikkei. After that, however, the path is much less certain and a reduction in interest rates in July is not justified. The financial market is currently expecting three interest rate cuts from the ECB this year.
On the US stock exchanges, the Dow Jones surpassed the 40,000 point mark for the first time in its history on Thursday thanks to hopes that interest rates would soon fall. Over the course of time, however, the prices crumbled again and in the end the index closed 0.1 percent lower at 39,869 points. The broad S&P 500 lost 0.2 percent to 5,297 points and the technology-heavy Nasdaq lost 0.3 percent to 16,698 points.
The Asian stock markets were also somewhat weaker today. In Tokyo, the 225-stock Nikkei index fell 0.4 percent to 38,782 points and the broader Topix was 0.2 percent higher at 2,742 points. The Shanghai Stock Exchange remained almost unchanged at 3,121.77. The index of major companies in Shanghai and Shenzhen fell 0.2 percent to 3,633.56 points.
The Swiss electrical engineering group ABB is taking over a business from rival Siemens. ABB buys the wiring accessories division of Siemens in China and thus strengthens itself in the area of building control. The business generated sales of a good $150 million in 2023 with 350 employees and will make a positive margin contribution for ABB. The transaction is expected to close within the next twelve months.
Bertelsmann boss Thomas Rabe is entering his last year as chairman of the Adidas supervisory board with meager approval. Only 69.04 percent of the shareholders represented voted for his re-election at the general meeting in Fürth on Thursday, Adidas said. Majorities of 90 percent or more are common at general meetings. The voting rights advisor ISS had previously recommended that Rabe not be elected because, as CEO of the media group Bertelsmann and its subsidiary RTL, he had too little time for Adidas.