market report
After the sharp decline in US inflation, the chapter of key interest rate increases in the USA is now closed for investors on the global financial markets. The DAX starts with slight price gains.
After the strong previous day, the DAX posted slight gains in the middle of the week. At the start of trading on XETRA, German standard stocks rose by 0.1 percent to 15,632 points. In the first few minutes of trading, things continue to rise towards the 15,700 point mark.
The hope of an end to interest rate hikes in the USA continues to support prices. From a chart perspective, the bottom formation in the DAX has been completed and the correction has ended, explains analyst Jochen Stanzl from broker CMC Markets. “It’s already Christmas for investors.”
With the jump over the barrier at 15,500/15,600 points, the technical picture in the DAX has brightened significantly. The German leading index is now setting its sights on its 200-day line (currently at 15,646 points). The average of the last 200 days is an important indicator of the long-term trend. A daily, or better still weekly, closing price above this would give the DAX rally new impetus – otherwise a sideways or slight downward movement would begin.
From a fundamental perspective, it is primarily the lower interest rate expectations that could give prices a further boost. US inflation fell to 3.0 percent in October. The core rate, which excludes energy and food prices, was only 0.2 percent compared to the previous month.
“The data supports the expectation that the US Federal Reserve will not decide on any further interest rate steps,” says Johannes Mayr, chief economist at asset manager Eyb&Wallwitz. Commerzbank economists Christoph Balz and Bernd Weidensteiner are also convinced that a further interest rate hike by the Federal Reserve is now becoming increasingly unlikely.
“The Fed is through and market interest rates have reached their peak,” emphasize the experts at ING Bank. This is a crucial moment for the markets because in most cases this is subsequently accompanied by falling market interest rates. As a rule, this is a good time to bet on rising prices.
Another positive aspect is the news that the renewed feared standstill of government business in the USA appears to have been averted. Members of the House of Representatives have approved a draft interim budget bill with more than the required two-thirds majority. Any approval that is still required in the Senate is considered a formality.
Positive guidelines for DAX trading come from Wall Street: The Dow Jones index of standard stocks closed 1.4 percent higher at 34,827 points yesterday evening. The technology-heavy Nasdaq advanced 2.4 percent to 14,094 points. The broad S&P 500 gained 1.9 percent to 4,495 points.
The Asian stock markets also rose significantly in the middle of the week. The Japanese Nikkei passed the psychologically important mark of 33,000 points for the first time in almost two years and closed 2.5 percent higher at 33,520 points. The CSI 300, which tracks the share prices of the largest companies on the Shanghai and Shenzhen stock exchanges, gained 0.7 percent. The Hang Seng Index for the Hong Kong Special Administrative Region even climbed 3.7 percent in late trading.
On the foreign exchange markets, the lower interest rate expectations put the dollar under enormous pressure yesterday. At the same time, the euro appreciated significantly against the dollar. In the morning, the European common currency was able to largely defend its price gains; the euro was trading at $1.0868, 0.1 percent lower. Gold can even build on yesterday’s gains; a troy ounce of gold is currently trading at $1,969.
Oil prices rose slightly in the middle of the week. In the morning, a barrel (159 liters) of North Sea Brent for delivery in January cost $82.91. That was 44 cents more than the day before. The price of a barrel of US WTI for delivery in December rose 39 cents to $78.65. There had been significant losses in oil prices in the previous week.
Siemens Energy shares are initially the biggest DAX winner. The day after the federal government provided the guarantee, the company announced a record loss. Almost 4.6 billion euros in the past financial year are by far the largest loss in the young history of the energy technology group. The cause is the problems in the wind power business, which regularly wreak havoc on Energy’s balance sheet and which reached a peak in the last financial year.
Infineon shares are also in demand in early trading. The chip manufacturer has achieved record sales and profits in the middle of a billion-dollar investment offensive. In the past 2022/2023 financial year, revenues rose by 15 percent to 16.31 billion euros and the segment result by 30 percent to 4.4 billion euros. The dividend is expected to increase from 0.32 to 0.35 euros per share.
Shares in the electronics trading holding Ceconomy rose by a double-digit percentage in early trading. Traders referred to a report by “Manager Magazin” that the Chinese online retail giant JD.Com was showing interest in the parent company of Media Markt and Saturn. The acquisition of a share package from the conglomerate Haniel should pave the way for this.
The SDAX group Grand City Properties benefited from strong demand for living space in the first nine months. Net rental income rose by four percent to 307.5 million euros by the end of September. However, higher financing costs put pressure on the operating result (FFO1) in the reporting period. The real estate group confirmed its goals for the year as a whole.
The drug manufacturer Dermapharm, which is also listed in the SDAX, benefited from the good run of its subsidiary Arkopharma and increased demand for dietary supplements and herbal extracts in the first three quarters. The group was thus able to cushion the end of vaccine production for the Mainz manufacturer BioNTech. Compared to the previous year, sales rose by 18 percent to almost 867 million euros.
Goldman Sachs bosses are considering higher bonuses to retain top traders and dealmakers this year, according to insiders. Despite a third-quarter profit decline, Goldman executives discussed bonuses for top employees in its commercial and investment banking division, which accounts for about 68 percent of revenue, people familiar with the matter said.
The robotaxi company Cruise has now suspended all of its trips on public roads in response to an accident involving a pedestrian in San Francisco. The company, which belongs to the car giant General Motors, said yesterday that the aim was to regain trust while investigations were ongoing. Previously, only the operation of cars without people behind the wheel had been stopped.
Accommodation platform Airbnb is strengthening its artificial intelligence ambitions with the purchase of the new start-up from one of the inventors of Apple’s voice assistant Siri. Airbnb did not mention the purchase price, but according to information from the business broadcaster CNBC it was just under $200 million. It is not known what exactly the start-up Gameplanner.ai is working on.