market report
Investors continue to revel in the AI euphoria rekindled by Nvidia. The DAX is likely to start the last trading day of the week with gains – always in sight: the record high of above 17,400 points.
Anyone who had predicted profit-taking in the DAX at the end of the week after the previous day’s strong price gains was disappointed: the DAX is likely to start the last trading day of the week with a small premium. The broker IG currently values German standard values 0.2 percent higher at 17,408 points.
This means that the DAX is keeping its sights firmly on its new record of 17,429 points, which was set just yesterday. With the new record high, the German stock market barometer sent a strong buy signal. However, market observers warn that the DAX is now “overbought”.
Stock market experts describe a stock or index that has experienced a long or strong price increase as “overbought”. However, the higher the price rises, the fewer investors are willing to buy at the high level. An overbought market situation therefore tends to indicate falling prices.
Meanwhile, there is movement in the individual stocks today: three DAX companies, Allianz, BASF and Deutsche Telekom, opened their books this morning. Fresh impulses also come from the ifo index, Germany’s most important leading indicator, during trading.
The day before, the US chip company Nvidia had revived the hype about artificial intelligence (AI) on the stock exchanges with strong figures and an optimistic outlook. “The Nvidia effect has shaken up global equity markets, providing a breath of fresh air to markets that looked threateningly set for a 3 to 5 percent decline,” said Chris Weston, head of research at Pepperstone in Melbourne.
Nvidia itself rewarded itself with a Wall Street record: yesterday’s price increase of 16.4 percent gave the chip company the largest increase in stock market value in one day. Nvidia’s market capitalization increased by around $277 billion. This brings the company closer to the two trillion dollar mark. Nvidia now only has Apple and Microsoft ahead of it in terms of market value.
The AI euphoria also brought big profits to Wall Street yesterday. The Dow Jones index of standard stocks closed 1.2 percent higher at 39,069 points. The technology-heavy Nasdaq advanced three percent to 16,041 points. The broad S&P 500 gained 2.1 percent to 5,087 points.
Only a few and rather cautious impulses are coming from the Asian stock markets this morning: the Shanghai stock exchange is currently up 0.3 percent. The index of major companies in Shanghai and Shenzhen lost 0.1 percent. The Tokyo Stock Exchange is closed on Friday for a public holiday. Just yesterday, the Japanese leading index Nikkei reached a new record high after almost 35 years.
The euro is oscillating sideways in Asian foreign exchange trading; the European common currency is currently trading at $1.0832. The price of gold continues to fall to around $2,022 per troy ounce.
The chemical company BASF is launching another cost-saving program due to weak demand in Europe. The DAX group announced today when presenting the final annual figures for 2023 that additional costs of one billion euros will be saved annually at the Ludwigshafen site by 2026. This will also involve further job cuts; the details are currently being worked on.
Supported by robust customer growth, Deutsche Telekom achieved its full-year targets. Adjusted operating profit increased by four percent to 40.5 billion euros and free cash flow increased by more than 40 percent to 16.1 billion euros. On this basis, the company forecast an increase in operating profit by six percent to 42.9 billion euros and in cash flow by 16 percent to 18.9 billion euros for 2024.
Allianz once again achieved record operating results last year. The operating result of the Munich life insurance group rose by almost seven percent to 14.7 billion euros. This time the profit driver was life and health insurance, which benefited from rising interest rates. The dividend will increase by 2.40 to 13.80 euros per share because Allianz wants to distribute a larger portion of its profits to shareholders in the future.
At Lufthansa, four of six board members are leaving – but Lufthansa boss Carsten Spohr remains in office. Lufthansa announced yesterday that the board of directors would be reduced from six to five positions. The aim is to tackle the challenges facing the industry with “new momentum and a changed team that combines even more international experience and diverse perspectives,” said Supervisory Board Chairman Karl-Ludwig Kley.