market report
According to a media report, there is now a prospect of an agreement in the US debt dispute. But the DAX investors remain on their guard. More than a stabilization attempt does not seem possible for the time being.
At the end of a weak week, the DAX continues to struggle. The broker IG appraised the DAX around one and a half hours before the start of XETRA, only slightly above yesterday’s closing price of 15,794 points. The day before, the leading German index had temporarily fallen to 15,726 points. The price losses since the record high of 16,332 points have already totaled more than 600 points.
In view of the recent drastic price losses in German standard stocks, some market observers are also warning that DAX buyers could have fallen into a “bull trap”. In fact, there is increasing evidence that the recent breakout to a new all-time high a week ago was a false breakout on the upside. True to an old stock market adage, such false breakouts are always followed by dynamic downward movements.
The US debt dispute continues to keep investors in suspense at the end of the week. According to a media report, a speedy solution is now emerging. The New York Times reported, citing unnamed sources, that Democratic and Republican negotiators had begun drafting a legislative text. However, some details are still open. Yesterday, the rating agency Fitch threatened to downgrade the United States’ top credit rating to “AAA”.
Inconsistent specifications for DAX trading come from Wall Street. The Dow Jones index of standard values closed 0.1 percent lower at 32,764 points. The tech-heavy Nasdaq, on the other hand, advanced 1.7 percent to 12,698 points. The broad S&P 500 gained 0.9 percent to 4151 points.
An optimistic forecast at Nvidia made for a better mood. The group expects quarterly sales 50 percent above analysts’ expectations. The hype about artificial intelligence (AI) gave the US chip manufacturer a boom in demand. Nvidia’s stock jumped 24 percent.
The optimistic outlook of the US chip manufacturer Nvidia gives a boost to the Tokyo stock exchange at the end of the week, with values from the semiconductor industry in particular being in demand. Around half an hour before the close of trading in Tokyo, the Nikkei index, which comprises 225 stocks, is 0.7 percent higher. The Shanghai stock exchange is up 0.3 percent.
In Asian FX trading, the dollar is showing weakness across the board. At the same time, the euro rose by 0.2 percent to $1.0741. The weaker dollar is benefiting demand for dollar-denominated commodities, with the troy ounce of gold currently trading at $1948, up 0.4 percent.
In the DAX, the focus is on the VW share in the morning. The car company and its subsidiary Audi have apparently agreed to pay $85 million in damages in the context of the diesel fraud scandal with the US state of Texas. Texas Attorney General Ken Paxton said in a statement that the companies have agreed to the agreement in principle.
Today at 11 a.m. at its headquarters in Ludwigshafen, Palatinate, the chemical company BASF is presenting a new barge for transporting important raw materials on the Rhine. The company is responding to the extremely low water levels on the Rhine in 2018 with the shallow-draft ship. BASF transports 40 percent of the goods at its main plant by ship.
Lufthansa expands to Italy. After months of negotiations, the MDAX group has agreed with the Italian state to take over a minority stake of 41 percent in the airline Ita Airways, as stated in a statement to the stock exchange yesterday. For this purpose, Ita is to receive 325 million euros in equity from Lufthansa cash funds.
Deliveries of corona vaccines to Germany can probably be reduced and stretched. According to information from the German Press Agency, this emerges from documents from the Ministry of Health for the Budget Committee of the Bundestag. The German payment obligation to the manufacturer Pfizer/BioNTech of 2.1 billion euros is expected to be reduced by a total of 500 million euros.
The US carmaker Ford has agreed with Tesla on the joint use of charging stations in the USA. By the beginning of 2024, Ford owners will be able to charge their e-cars at more than 12,000 Tesla stations. The agreement makes Ford the first major automaker to adopt Tesla’s charging standard, giving it access to the largest network of high-speed charging stations in the United States.