market report
After the recent record hunt, the DAX is likely to go slightly downhill at the beginning of the week. A holiday on the US stock exchanges is also causing reluctance among investors.
Investors’ buying mood on the German stock market noticeably decreased at the beginning of the week. Restraint is the order of the day after the latest record rally, which pushed the DAX to an all-time high of 17,198 points on Friday. The broker IG currently estimates the German leading index at 17,086 points, 0.2 percent below its XETRA closing price on Friday.
It will now be exciting to see whether the DAX will be able to resume its recent upward momentum over the course of the new trading week. After all, Friday was the big expiration day: options and futures on indices and stocks expired on the Eurex futures exchange. This resulted in a market shakeout, which in the past has often been the starting point for a trend reversal.
In the last trading week, investors came to terms remarkably quickly with the fact that the Fed would probably only lower interest rates for the first time in June and not in May. The number of interest rate cuts this year is also likely to be smaller than the markets had hoped until recently.
“Investors seem to think that postponed does not mean canceled. Or to put it another way, the interest rate turnaround will definitely come, just a little later,” wrote analyst Christian Henke from Handelshaus IG.
Meanwhile, Wall Street is issuing negative guidelines for DAX trading. The Dow Jones index of standard stocks closed 0.4 percent lower at 38,627 points on Friday. The technology-heavy Nasdaq fell 0.8 percent to 15,775 points. The broad S&P 500 lost 0.5 percent to 5,005 jobs.
An unexpectedly significant increase in producer prices had fueled inflation concerns among investors and clouded the mood on the US stock markets at the end of the week. Wall Street remains closed today: Americans are celebrating the holiday “Washington’s Birthday”, also known as “Presidents’ Day”.
The Japanese stock markets cannot escape the weak guidance from Wall Street at the beginning of the week. The Nikkei just left trading with a loss of 0.4 percent to 38,470 points. “Unless there is a new catalyst, it seems difficult to push prices back to record levels,” said Maki Sawada of Nomura Securities.
In contrast, the Shanghai stock exchange is currently up 1.1 percent. Mainland China’s stock exchanges remained closed throughout last week for Chinese New Year.
The euro is hardly moving in Asian foreign exchange trading. The European common currency is trending sideways at $1.0782. Gold, on the other hand, continues to look up. A troy ounce of the yellow precious metal costs just under $2,021 this morning, 0.3 percent more.
BASF shares in the DAX could be worth a look today. Despite the announced review by the Federal Ministry of Economics, BASF CFO Dirk Elvermann sees no hurdles for the planned sale of the oil and gas subsidiary Wintershall Dea to the British oil company Harbor Energy: “The Wintershall Dea assets to be sold do not represent critical infrastructure.”
The DAX group Rheinmetall is planning to build a new plant to produce artillery ammunition in Ukraine. The German defense company and a Ukrainian partner company signed a declaration of intent on the sidelines of the 60th Munich Security Conference, as the company announced on Saturday.
The three-day pilot strike at Lufthansa subsidiary Discover ends today at midnight. But on Tuesday morning, Lufthansa’s ground staff at the Frankfurt/Main, Munich, Hamburg, Berlin, Düsseldorf, Cologne-Bonn and Stuttgart locations are due to stop work. Hundreds of flights are expected to be canceled again.