market report
The DAX turned around sharply yesterday and broke an important support. The further prospects on the German stock market have thus clearly clouded over in one fell swoop.
Yesterday’s trading day is a prime example of how close joy and sorrow are to each other on the stock market. The initial Nvidia euphoria quickly turned into disillusionment, and fears of interest rates spread. The consequence: the DAX closed 0.7 percent lower at 15,621 points after rising to 15,897 points in early trading.
The fact that the DAX ended trading almost at the daily low is not a good sign. In fact, further losses are looming on the last trading day of the week. The broker IG assesses the leading German index 0.3 percent lower at 15,574 points.
With yesterday’s price slide, the technical prospects in the DAX suddenly clouded over, as the stock market barometer broke the important support zone at 15,700 points. The low points from August and July at 15,469/15,456 points are now already moving back into the focus of technically oriented investors.
From a fundamental perspective, it is primarily the interest rate fears that have arisen in the wake of robust economic data and the associated rising bond yields that have spoiled investors’ appetite for equities. Investors are now eagerly awaiting today’s speeches by Fed Chair Jerome Powell and ECB Chair Christine Lagarde at the Federal Reserve Conference in Jackson Hole.
“A balanced speech is expected that does not slam the door to a further rise in interest rates,” explains market expert Robert Rethfeld from Wellenreiter-Invest with a view to Powell’s speech. “The probability of a rate hike on November 1 is not inconsiderable 42 percent.”
Against this background, investors on Wall Street had lost their courage during the course of the trading day. The Dow Jones index of standard values closed yesterday 1.1 percent lower at 34,099 points. The tech-heavy Nasdaq fell 1.9 percent to 13,463.97 points. The broad S&P 500 lost 1.3 percent to 4,376 points.
But some market experts also refer to the old stock exchange strategy “buy the rumor, sell the fact” – buy the rumor, sell the news. The markets had also risen in anticipation of excellent Nvidia numbers on the previous days. When Nvidia actually reported outstanding numbers, it was the perfect opportunity for many investors to take profits.
The negative guidelines from Wall Street are not leaving investors in the Asian stock markets indifferent either. The Japanese leading index Nikkei, which comprises 225 stocks, collapses by 2.0 percent shortly before the close of trading in Tokyo, with tech stocks in particular being under massive pressure. The Shanghai stock exchange is currently down 0.5 percent.
The US interest rate expectations, which have risen again, are also reflected in the foreign exchange market: the dollar is showing strength against important currencies. At the same time, the euro fell further in the morning and slipped below the $1.08 mark. The common currency is currently trading at $1.0781.
In the further course of the day, the ifo index, which is due at 10 a.m. – the most important German economic indicator – could cause movement on the currency and stock markets. An ounce of gold currently costs $1,914.
TUI draws attention to itself on the German stock market in the morning. The travel company opened its new corporate headquarters in Hanover today. The “TUI Campus” at the previous headquarters of TUI Germany had been under construction for two years. According to the company, 40 percent of the building was completely redesigned. Prime Minister Stephan Weil (SPD) is also expected to attend the opening.
Despite the ongoing economic downturn, the head of the brand at car manufacturer Renault expects higher sales figures for electrically powered vehicles this year. “Since the beginning of the year we have noticed an increasing demand for electric cars,” said Fabrice Cambolive in an interview with the specialist magazine “Autogazette”. That’s why he expects Renault to see an increase in electric cars in 2023 as well.
Unionized workers at South Korean automaker Hyundai plan to vote today on a strike. Two-month talks with the company about wage increases and extending the retirement age stalled last week. Should the employees go on strike, it would be the company’s first strike in five years.
At the Ultium Cells battery plant in Ohio, a joint venture between General Motos and LG, employee wages are to be increased by an average of 25 percent. For months, Democratic senators and the United Auto Workers (UAW) Ultium Cells union had publicly criticized the low wages at the Ohio plant.
With information from Angela Göpfert, ARD financial editors.