market report
Once again, investors have to be prepared for losses in the German stock market index. Weak US stock exchanges and the fear of a national bankruptcy in the USA are causing restraint on the stock exchange floor.
According to pre-market indications, the DAX is expected to be at 16,075 points at the start of trading on XETRA. This corresponds to a minus of 0.4 percent. Yesterday, the leading index ended trading with just as large losses. This is getting closer to the round mark of 16,000 points.
Investors’ greatest concern remains the fear of an imminent bankruptcy in the USA. The Dow Jones index of standard values closed 0.7 percent lower on Wall Street last night at 33,055 points. The broader S&P 500 dropped 1.1 percent to 4145 points. The Nasdaq technology exchange index lost 1.2 percent to 12,560 points.
The most recent summit meeting between President Joe Biden and Republican negotiator Kevin McCarthy ended yesterday evening again without a result. The two sides were optimistic that they could find a compromise. “In view of the ever shorter window of time until the day of potential insolvency, investors are becoming more and more nervous,” commented portfolio manager Thomas Altmann from QC Partners on the situation. According to forecasts by the Treasury Department, the US government is threatened with default from the beginning of June if the debt ceiling is not raised.
Investors are also holding back on the Asian stock exchanges in the morning. Profit-taking is also weighing on the 225-stock Nikkei Index following the recent rally in Japan. It was 1.1 percent lower at 30,624 points. The Shanghai stock exchange was down 0.5 percent. The index of the most important companies in Shanghai and Shenzhen lost 0.5 percent.
The mood in the Japanese economy is currently good. The overall index of sentiment for major manufacturers was up six, higher than in April, according to the Bank of Japan’s (BOJ) quarterly Tankan report. It was the first positive value in the current year. Experts expect a further increase for the Tankan report in August.
On the foreign exchange market, the euro tends to remain under pressure against the dollar after soaring in recent weeks. The common currency is trading at $1.0780 in the morning. The signs in the euro zone may point to further interest rate hikes. According to Bundesbank boss Joachim Nagel, the ECB must raise interest rates in the fight against inflation and accept that the economy will be dampened in the process. “Of course, not everyone likes that,” said Nagel yesterday at the Economic Day of the Economic Council of the CDU in Berlin.
A series of general meetings are scheduled for today on the German stock market. The shareholder meetings are mostly virtual, for example at the chemical company Lanxess, the online fashion retailer Zalando or the sporting goods company Puma. Investors are hoping for news on the business strategy or the profit prospects of the corporations.
The DAX group Bayer has placed bonds totaling three billion euros. The issue consisted of three tranches with maturities of 3.25 to ten years and was subscribed to around four times, Bayer said last night. The group intends to have the bonds listed on the Regulated Market of the Luxembourg Stock Exchange. The proceeds will be used for general corporate purposes, it said.
Things are getting serious for Netflix users in Germany who share an account across a household. The streaming giant warned its customers yesterday that it will soon be charging extra money for this. For each person who does not live under the same roof as the paying account holder, 4.99 euros per month should be due. Netflix is hoping for more revenue from this. The US company assumes that around 100 million households use the service with login data from others.