market report
At the start of the new week, DAX investors are cashing in. What happens next depends not least on tomorrow’s US consumer prices. The 18,000 has not yet been written off.
The DAX started the new trading week with a discount of 0.7 percent to 17,693 points. After last Thursday’s record high of 17,879 points, investors are cashing in today. The leading German index had already entered the weekend on Friday with a loss of 0.2 percent at 17,814 points. On a weekly basis, the DAX rose by around 0.5 percent.
“The next impulse towards 18,000 and more would have to come from the economy. Otherwise, a breather seems appropriate,” write Helaba market analysts in their weekly outlook. From a technical perspective, the DAX is “clearly overbought,” says portfolio manager Thomas Altmann from QC Partners. That’s why he expects “a difficult week” after the long record hunt.
Overall, many experts remain optimistic. The willingness to take profits has increased in the short term, but the upward trend remains intact, comments Jochen Stanzl, chief market analyst at CMC Markets. “Friday’s labor market data from the US supports the scenario of a soft or even no landing for the US economy, which is crucial for the jump in corporate profits expected and priced in by the stock market this year.”
“Even after more than four months of rallying, investors on the Frankfurt Stock Exchange have not lost their buying mood,” writes capital market strategist Jürgen Molnar from broker RoboMarkets. According to Molnar, the ECB and the Fed should only compete to see who will lower key interest rates first.
For investors, the next event is already coming up that demands their full attention: They are now waiting for the data on US inflation planned for tomorrow. “Will the US inflation rate quickly fall back to the Fed’s two percent target? The surprisingly strong rise in US consumer prices in January at least raised doubts in the markets four weeks ago,” said Commerzbank economist Christoph Balz. This also made the prospects of a quick interest rate cut dwindle.
At the end of the week, the US stock exchanges recorded price losses: The Nasdaq 100 initially increased its record high to almost 18,417 points, but then lost 1.5 percent to 18,018 points. The market-wide S&P 500 fell by 0.7 percent to 5,123 points. Both indices recorded weekly losses: While they were relatively small for the S&P 500, they were particularly significant for the Nasdaq 100 at one and a half percent.
The Dow Jones closed 0.2 percent lower at 38,722 points. He also had a weak weekly result.
The Nikkei closed 2.2 percent lower in the morning at 38,820 points. “Japanese stocks were also weighed down by the stronger yen. This trend is expected to continue until the end of the Bank of Japan (BoJ) policy meeting next week,” said Shuji Hosoi of Daiwa Securities. The yen strengthened against the dollar on signs the BoJ would abandon negative interest rates at its meeting next week. Market participants also pointed to profit-taking given recent gains.
Meanwhile, Japan’s economy recovered less strongly in the fourth quarter than experts expected. Based on a second estimate, the gross domestic product (GDP) rose by 0.4 percent on an annual basis. However, economists surveyed by Bloomberg had expected an increase of 1.1 percent.
Things looked better in China. The Hong Kong Special Administrative Region’s Hang Seng Index rose 1.3 percent to 16,570 points. The CSI 300 with large values from the trading centers in Shanghai and Shenzhen rose by 1.25 percent to 3,589 points. Consumer prices in China have risen for the first time in six months. This is well received on the stock exchanges, says analyst Thomas Altmann from the asset manager QC Partners, because “it drives away the dreaded specter of deflation.”
The Beijing government also vowed to boost home sales “vigorously” and “orderly” to shore up China’s struggling real estate market, but gave no details.
Bitcoin remains on record. The cyber currency rose by 4.2 percent to $71,259.75 this morning, making it more expensive than ever. “Investors could now set their sights on the $80,000 mark,” says Timo Emden from Emden Research. The expert believes that the rally could accelerate again if risk appetite continues to increase.
The cryptocurrency is currently benefiting from the expectation of long-term falling interest rates and higher demand for the approval of the first exchange-traded Bitcoin funds (ETF) that invest directly in the cyber currency.
The euro barely moved at the start of the week. In the morning the common currency cost 1.0937 US dollars, about the same as on Friday evening. The European Central Bank most recently set the reference rate at 1.0932 US dollars. The coming US consumer prices are also expected on the foreign exchange market. If the interest rate reduction hopes are confirmed, this could strengthen the euro due to the interest rate difference.
Commerzbank wants to stimulate growth in Swiss corporate banking after the decline of Credit Suisse. “We want a big piece of the cake,” Switzerland boss Marc Steinkat told the “Aargauer Zeitung”. Commerzbank has grown in the market by double-digit percentages every year and expects it to accelerate. It currently has outstanding loan commitments totaling eleven billion francs to corporate customers in Switzerland. A focus of the offer is trade financing. UBS announced its takeover of the ailing Credit Suisse almost a year ago and is currently in the process of integrating the smaller rival’s business.
The real estate group LEG ended last year with a loss of billions. The bottom line was that there was a loss of 1.56 billion euros due to a devaluation of the real estate portfolio, as the MDAX group announced. In the same period last year, LEG Immobilien reported a profit of a good 237 million euros. The company devalued the value of its real estate portfolio by 11.9 percent.
After the record year of 2022, the profit of the oil company Saudi Aramco fell last year. Despite the significant decline in surplus by around a quarter to a good 121 billion US dollars, the Saudi industry giant announced that the second-best result in the company’s history was achieved. In 2022, oil companies benefited from the sharp rise in oil and gas prices as a result of Russia’s war against Ukraine. In 2023, the situation on the oil and gas market largely returned to normal.