market report
Despite interest rate concerns and weak guidance from the USA, the DAX is currently stable and rising above the 17,800 point mark. However, investors are closely monitoring the situation in the Middle East.
The DAX starts the new trading day with a premium of almost 0.3 percent to 17,815 points. The German leading index could stabilize, but the correction scenario still dominates, comment the market observers at Helaba in their daily outlook. With prices below 18,000, the outlook remains clouded, according to their assessment.
“We are currently seeing a real rocking stock market. Of the twelve trading days after Easter so far, six have been positive for the DAX and six have been negative,” stated portfolio manager Thomas Altmann from QC Partners. After the previously long rally, the stock market barometer is still looking for a clear direction.
Yesterday, the DAX was barely changed at 17,770 points at the close of trading. According to analysts, the weighing issues for investors are the current weaker company reports and concerns about the timing of the US Federal Reserve’s first interest rate cut.
“The financial markets are dominated by one topic in particular: the lack of interest rate cut signals in the USA,” says Helaba. In view of the stubborn inflation in the USA, the Fed is signaling that it will continue to pursue a tight monetary policy course. A turnaround in monetary policy is now not expected on the financial markets until September. Just a few weeks ago there was speculation about June as the likely time for the first reduction.
But the situation in the Middle East also remains an issue: “Meanwhile, a possible escalation in Israel’s conflict with Iran hovers like a sword of Damocles over the prices of riskier investments, but so far there has been no sustained impulse towards increased risk aversion in investment behavior,” writes the Helaba. Whether it will stay that way is of course uncertain.
Today, investors are waiting, among other things, for the weekly figures on initial claims for US unemployment benefits. They hope that this will provide information about the Fed’s next steps. On the company side, the focus is on the figures from US streaming pioneer Netflix. Saturated markets in industrialized countries and tough competition are likely to have left their mark on the group’s quarterly balance sheet.
What is the interest rate situation in Europe? From the perspective of Bundesbank President Joachim Nagel, the European Central Bank (ECB) could actually lower interest rates again for the first time in June. The ECB Council has not made a decision, Nagel told “WirtschaftsWoche”. “We will analyze the incoming data carefully in the next few weeks and then make a decision. But a key interest rate cut in June has become more likely.”
In the USA, fears about a postponement of the interest rate turnaround also weighed on prices. The Dow Jones closed 0.1 percent lower at 37,753 points. The broader S&P 500 fell 0.6 percent to 5,022 points. The Nasdaq technology exchange index lost 1.2 percent to 15,683 positions.
Jay Hatfield, CEO and portfolio manager at asset manager InfraCap, said investors were initially too optimistic about the pace of interest rate cuts. Now they are overly pessimistic.
The Japanese stock market is robust today. The yen had stabilized somewhat, responding to statements from Japan and the USA that could pave the way for interventions in the foreign exchange market due to the strength of the dollar. The leading index Nikkei-225 closed 0.3 percent higher at 38,079 points.
In Australia there was also a slight increase. The S&P/ASX 200 rose 0.5 percent to 7,642 points. There were also increases in China. The CSI 300 with the most important stocks on the Chinese mainland stock exchanges rose by 0.4 percent to 3,580 points. The Hang Seng of the Hong Kong Special Administrative Region was recently up 1.3 percent.
The European car market recorded its first decline of the year in March. According to data from the manufacturers’ association Acea, new registrations in the European Union fell by 5.2 percent to one million vehicles. This is partly due to the early nature of Easter, the association explained.
There was a slump in electric cars of minus eleven percent. In Germany the decline was as much as 29 percent, which car manufacturers attribute to the abolition of government purchasing subsidies. Based on the first quarter, sales rose by 4.4 percent to 2.8 million.
The laboratory and pharmaceutical supplier Sartorius is struggling with persistently weak demand from China. In the first quarter, sales fell by a good nine percent to 820 million euros. Adjusted for currency effects, there was a decline of 7.6 percent. Operating profit (Ebitda) fell by almost 14 percent to 234 million euros. The bottom line is that profits in the first three months fell to 70 million euros from 116 million euros in the same period last year.
According to a media report, the US electric car manufacturer Tesla wants to let go of 300 employees at its German location in Grünheide. The digital business magazine reported that temporary workers will initially be affected by the job cuts starting on Monday “Business Insider” citing people familiar with the matter.
Demand for semiconductors for artificial intelligence has boosted business at Taiwanese chipmaker TSMC. In the first quarter, net profit rose to 225.5 billion Taiwan dollars (6.53 billion euros) from 207 billion dollars in the previous year. Sales rose 13 percent to $18.87 billion in the first quarter, slightly more than the group itself had expected. TSMC supplies its products to Apple and Nvidia, among others.
Network equipment manufacturer Nokia is struggling with weak demand from the telecommunications industry in the first quarter. Sales fell by a fifth compared to the same period last year to just under 4.7 billion euros. The mobile equipment division weakened the most because business in North America and India was poor. In contrast, Nokia achieved an increase of 25 percent to 597 million euros in operating profit adjusted for special items. The bottom line is that profits rose by a good half to 438 million euros.
The Swiss food company Nestlé is being criticized for baby food. According to an analysis by the Swiss organization Public Eye, which campaigns for compliance with human rights by companies based in Switzerland, the company adds sugar to baby food in some countries. Developing and emerging countries are affected, but western countries like Germany are not. Nestlé did not dispute the results of the laboratory analyzes when asked.