Market report: Why investors are getting nervous


market report

Status: 05/12/2023 10:24 am

Nervousness is spreading among DAX investors at the end of the week. But it’s not just the ongoing dispute over the US debt ceiling that has investors worried.

The DAX started the last trading day of the week with a premium. At the XETRA opening, the German standard values ​​increased by 0.5 percent to 15,918 points, but in the first few minutes of trading the price gains crumbled towards the previous day’s closing price. At the end of the week, investors became more aware of the dispute over the debt ceiling in the USA.

“A failure of the negotiations between Democrats and Republicans on the debt ceiling in the USA could probably lead to a price slide of unforeseen proportions on the world stock exchanges,” warns Jürgen Molnar, RoboMarkets’ capital market strategist.

For the time being, however, the DAX continues to stare like a rabbit at the snake, whereby the snake in this context is of course the 16,000 point mark. Recently, the German stock exchange barometer had reached numerous high points in the orbit of the psychologically important round mark – this has mutated into a serious resistance. However, the longer a clear breakout above 16,000 is in sight, the more nervous investors will become.

The phenomenon of the extremely small fluctuation margins is coming to a head, explains Jörg Scherer, Head of Technical Analysis at HSBC. He still expects an impetus to move soon, which should be “fast and dynamic”.

The International Monetary Fund (IMF) warned last night that a potential US default could have a “very serious” impact on the global economy. “For this reason, we urge the parties concerned to find consensus as a matter of urgency to resolve this matter as soon as possible,” IMF spokeswoman Julie Kozack said in Washington yesterday.

Even if the dispute over the US debt ceiling is an old acquaintance on the stock exchange and the experience of recent years has shown that those responsible in the USA have always raised the limit at the last second and thus prevented default: Investors are becoming so slow now a bit nervous.

But not only this dispute weighs on the buying mood of investors. “On Thursday, a significant increase in the number of initial applications caused a risk-off mood on the capital market,” Robert Rethfeld from Wellenreiter-Invest points out another mood dampener.

The rise in initial jobless claims fueled investors’ economic pessimism again. The economic fears smoldering in the background have been preventing the global stock markets from performing better for weeks.

Worries about the US debt limit had already made investors on Wall Street nervous in the evening. The Dow Jones index of standard values ​​closed 0.7 percent lower at 33,309 points. The tech-heavy Nasdaq, on the other hand, advanced 0.2 percent to 12,328 points. The broad S&P 500 lost 0.2 percent to 4130 points.

Concerns about the economy pushed the Chinese stock exchanges into the red at the end of the week. The Shanghai stock market fell by almost one percent to 3281 points. The index of the most important companies in Shanghai and Shenzhen lost one percent to 3951 points. In Japan, on the other hand, positive news from companies caused prices to rise. The Tokyo Nikkei Index, which comprises 225 stocks, was one percent higher at 29,404 points.

The dollar shows some weakness in early forex trading. At the same time, the euro rose by 0.2 percent to $1.0931. The price of gold fell again in the morning: Currently, just under 2010 dollars are paid for a troy ounce of the yellow precious metal.

Skepticism about global economic development is also weighing on oil prices. Oil prices fell further in early trade. In the morning, a barrel (159 liters) of North Sea Brent for delivery in July cost 74.61 US dollars. That was 37 cents less than the day before. The price of a barrel of the American grade West Texas Intermediate (WTI) for June delivery fell by 30 cents to $70.57.

In the DAX, the focus is on the Allianz share with figures. Price increases and more business in property insurance caused the operating result to soar by 24 percent to 3.73 billion euros in the first quarter. Net profit, which was decimated a year ago by provisions for the “Structured Alpha” hedge fund affair, more than quadrupled to 2.03 (0.47) billion euros, but was below expert expectations.

Deutsche Post: Warning strike at the DHL hub in Halle

At the DHL hub in Leipzig, employees of the logistics center went on a warning strike in the evening. The DPVKOM union had called for the 37-hour work stoppage until Saturday morning. Among other things, the union is demanding a wage increase of twelve percent for the company’s more than 6,000 employees.

The wholesale group Metro continued to increase sales in the second quarter of the financial year. However, the operating result declined. The wholesaler posted a net loss of 107 million euros, after minus 284 million euros in the previous year. The forecast for the 2022/23 financial year was confirmed.

Thanks to the Easter wave of travel, passenger traffic at Frankfurt Airport has recovered a little further from the Corona crisis. The airport operator Fraport counted around 4.8 million passengers in April, 21.5 percent more than a year earlier. The volume was 20 percent lower than before the pandemic in April 2019. In March, the backlog was around 23 percent.

The large number of old projects weighed on wind turbine manufacturer Nordex at the start of the year. The operating margin for earnings before interest, taxes, depreciation and amortization (Ebitda) was minus 9.4 percent, after minus 9.5 percent a year earlier. The industry is currently having to process many unprofitable orders where the increased costs cannot be passed on to customers.

Investors cash in at Vitesco after submitting quarterly figures, dealers speak of profit-taking. Jefferies Research’s Himanshu Agarwal noted a weak first quarter. The automotive supplier slipped into the red at the beginning of the year due to high costs for its conversion and for the build-up of inventories.

Tesla raises prices for electric cars again in the US. According to information on the company’s website, the premium for Model S, X and Y is in the low single-digit percentage range. The Model S now starts at $88,490, the Model X starts at $98,490 and the Model Y starts at $47,490. This means that prices are still well below the level at the beginning of the year.

Thanks to a thriving jewelry business, luxury goods maker Richemont has grown strongly. In the past 2022/23 financial year, the turnover of the Swiss group rose by 19 percent to a record value of 19.95 billion euros. The operating result of the manufacturer of Cartier jewelery as well as watches from the brands A. Lange & Söhne and IWC even climbed by more than a third.

The video game company Nintendo has released a new part of the legendary Zelda series. The Legend of Zelda: Tears of the Kingdom went on sale at midnight. Because of the time difference, Japanese video game fans got their turn first. From Tokyo to Paris, queues formed hours before stores opened at night because of the Zelda release.

A setting error in the cloud has caused a data breach at the world’s largest carmaker Toyota. Vehicle data from around 2.15 million customers in Japan from November 2013 to mid-April 2023 has been made publicly available, Toyota said. This could include details such as vehicle locations and vehicle device identification numbers.

Google will also launch its AI text robot Bard in the European Union and Germany. This was announced yesterday by CEO Sundar Pichai. There have recently been fears in the industry that the use of a key tool with artificial intelligence functions in Europe will not be possible for a longer period of time.

Elon Musk has announced his resignation as CEO of Twitter. A successor has been found and will take over in about six weeks, Musk said in a tweet yesterday. According to the newspaper “Wall Street Journal”, Linda Yaccarino, who is responsible for advertising at the US media group NBCUniversal, is a possible candidate for the post of head of Twitter.

Twitter boss Musk has announced his imminent retirement.
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“Whoever he hires to run Twitter,” the person “deserves our sympathy and pity,” said independent tech expert Rob Enderle of the Enderle Group.

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