market report
Interest rate concerns are likely to cost the DAX a few points at the start of trading today. For many investors, an interest rate cut by the US Federal Reserve in March seems increasingly unlikely.
The DAX is unlikely to make any progress today either. Before the start of trading, the broker IG estimated the German leading index at 16,430 points, close to its closing level yesterday. It has now lost around a quarter of the price gains from the rally from October to the record high of just over 17,000 points in mid-December.
Yesterday the DAX temporarily fell to its lowest level since the beginning of December. Ultimately it closed with a loss of 0.8 percent to 16,432 points. It looks like all the good news has been processed and all interest rate cut hopes have been priced in and the market is ripe for a sharper correction, commented Konstantin Oldenburger, market analyst at CMC Markets. “The big question now is how far the DAX has to fall before there is greater buying interest,” said portfolio manager Thomas Altmann from asset manager QC Partners.
The mood among investors remains clouded, and dampened hopes of imminent interest rate cuts in the USA are weighing on them. US industry only recorded a slight increase in production in December. However, retailers in the USA were able to increase their sales more strongly than expected before the turn of the year. This fueled concerns about the timing of the Federal Reserve’s expected monetary easing.
“The data gives investors cause for concern that the Fed is unlikely to cut interest rates in March after all,” said Sam Stovall, chief strategist at CFRA Research in New York. “The market is in something of a digestion phase at the moment, reassessing the likely timing and size of rate cuts this year.” Since the stock market would benefit from lower interest rates, this is bad news for investors.
Interest rate fears are also weighing on investor sentiment in the USA following the latest US economic data. The Dow Jones closed yesterday 0.3 percent lower at 37,266 points. The technology-heavy Nasdaq fell 0.6 percent to 14,855 points. The broad S&P 500 lost 0.6 percent to 4,739 points.
In Asia, consolidation continued after weak US data from the previous day. There were higher taxes in China. The Chinese stock exchanges responded to new economic data. According to official figures, the Chinese economy grew by 5.2 percent last year. This means that the government’s growth target of around five percent was only slightly exceeded.
The Chinese stock exchanges reacted bluntly. The CSI 300 with the most important values from the trading centers in Shanghai and Shenzhen recently lost 2.2 percent to 3,229 points, the Hang Seng Index of the Hong Kong Special Administrative Region fell by almost four percent to 15,233 points. In Japan, the Nikkei closed at around the previous day’s level at 35,466 points.
The euro exchange rate rose slightly today. In the morning, the common currency was trading at 1.0895 US dollars, slightly higher than the previous evening. The price recovered from its lowest level since mid-December, which was reached at $1.0845 in the middle of the week. In recent trading days, robust US economic data and statements from the Fed’s ranks put a damper on speculation about an imminent interest rate cut, which gave the US currency a boost.
A strong jewelry business helped the Swiss luxury goods group Richemont once again increase sales in the Christmas quarter. Sales revenue rose by eight percent to 5.59 billion euros in the October to December period, excluding exchange rate effects. That is slightly more than experts had predicted. However, as with other industry representatives, growth slowed compared to the previous quarter.
As expected, the restructuring of the agricultural chemical and pharmaceutical company Bayer under new boss Bill Anderson will cost many employees their jobs. As part of the planned streamlining of the administration and the desired acceleration of decision-making processes, there will likely be a significant reduction in personnel in Germany, the company announced.
Samsung is relying on artificial intelligence to compete against Apple’s iPhone with its next top smartphone. In the Galaxy S24 series, AI software is intended to improve images, summarize texts and translate conversations, among other things. A striking detail of the new generation: The angular frame of the basic versions S24 and S24+ is very reminiscent of the contours of the latest iPhones.