Market report
The DAX is likely to start the new trading week hardly changed. Given the gains of the past few days, some experts are already talking about an upcoming year-end rally.
Before the start of Xetra trading, the broker IG estimates the German leading index very close to its previous day’s closing price. At the end of the week, the German leading index was 0.3 percent higher at 15,189 points. The DAX rose on every day of the past trading week. That was last the case in the spring.
Market expert Thomas Altmann from asset manager QC Partners expects that it will be difficult for the DAX to repeat the impressive gains from the previous week. “Investors now have to weigh up the ongoing high geopolitical risks and the recent positive news from the central banks and the US labor market.”
Other experts are more optimistic: After the significant price losses from the beginning of August to the end of October, “the heavily oversold DAX started a recovery in the first week of November, which is likely to continue in the coming weeks,” expects Commerzbank analyst Andreas Hürkamp.
Claudia Windt, analyst at Helaba, also points out the ease with which the leading German index regained the hurdle of 15,000 points. “This could be the start of the year-end rally, as the still low valuation is attracting investors,” she states.
Last Friday, a cooling US labor market further fueled speculation that interest rate hikes would end and boosted the stock indices on Wall Street: The Dow Jones closed 0.7 percent higher at 34,061 points. The broader S&P 500 rose by 0.9 percent to 4,358 points, the technology exchange Nasdaq 100 index rose 1.4 percent to 13,478 points.
“The report is consistent with the market’s views that the job market and economy are slowing, and that will keep the Fed on hold and prompt central banks to cut rates next year,” had Jay Hatfield, market expert from Infrastructure Capital Management, said.
The mood on the stock market in Asia is also excellent: the Nikkei closed today with an increase of 2.4 percent to 32,708 points.
The euro is benefiting from interest rate hopes in the USA and has remained above the $1.07 mark at the start of the new week. On Monday morning the common currency cost 1.0735 dollars, about the same as before the weekend.
According to a press report, the pharmaceutical and chemical group Merck KGaA could cut further jobs. The chemicals division should reduce costs by up to 90 million euros, the “Frankfurter Allgemeine Zeitung” reported, citing a memo to employees from Kai Beckmann, a member of the management board and responsible for the electronic chemicals business. Upon request, Merck confirmed the authenticity of the document.