Market report
As of: 07/20/2021 7:51 a.m.
After the very weak start to the week, the DAX should only make up a small part of its price losses at the start of trading, if at all. The nervousness is high.
The unofficial early trading before the actual stock exchange opening in Frankfurt indicates an almost unchanged trading opening. The indications of various banks on the DAX are in the range of 15,133 points, which is yesterday’s level.
On Monday, the DAX slumped 2.6 percent, leaving the downward sideways trend that had been ongoing since the end of May.
In falling markets, buying interest has gradually set in, commented Thomas Altmann from QC Partners. “On the other hand, we are also seeing that the limits of those willing to buy are gradually shifting downwards. So far, the stock exchanges have lived mainly from the fact that willingness to sell was low.” Should this remain high or even increase with further price losses, then further price losses are possible.
New old worries in America
The start of the new stock market week also failed yesterday on the US stock exchanges. Above all, the rapid spread of the delta variant and the concern that this mutant could slow global economic growth put pressure on prices. The US health authority CDC, for example, warned against traveling to the country in view of the sharp increase in infections in Great Britain.
The Dow Jones closed 2.1 percent lower to 33,962 points. The world’s best-known stock index fell below the 34,000 mark, the lowest level in almost a month. The broad S&P 500 lost 1.6 percent to 4258 points. On the technology exchange Nasdaq, the composite index fell 1.1 percent to 14,274 points.
Everyone would have relied on a significant relaxation of the pandemic restrictions in the summer, said investment strategist Michael Hewson from brokerage firm CMC Markets. “But if we look at the increasing number of infections with the delta variant of the coronavirus, that optimism fades.”
The papers of Boeing, airlines like American Airlines, Delta Airlines and Jetblue lost three to almost five percent. The shares of hotel operators and cruise lines also fell back.
Get it now?
Naeem Aslam, chief market analyst at the brokerage house AvaTrade, saw the current price setbacks as a buying opportunity. The high vaccination rates made new, severe lockdowns unlikely. One colleague is more cautious: “Even if it is just a correction, investors need significant impulses from the economic data in order to push prices back to record levels,” objected analyst Pierre Veyret of the brokerage firm ActivTrades.
In addition to stocks, commodities and cryptocurrencies suffered. North Sea oil of the Brent variety temporarily only cost a good 66 dollars per barrel (159 liters). “Opec +”, which includes the members of the export cartel and other producing countries such as Russia, agreed at the weekend to expand production between August and December by two million barrels per day.
Bitcoin is trading below the $ 30,000 mark in the morning. The euro is less than $ 1.18.
Bonds in demand
Investors turned to the bond market even more than before. Demand for US Treasuries temporarily pushed yields on trend-setting ten-year bonds to a five-month low of 1.224 percent. In the morning, the yield in unofficial trading drops further to below 1.2 percent. For comparison: the previous year’s high of the return was almost 1.78 percent. Ten-year Bunds yielded minus 0.39 percent.
IBM surprises positively
IBM trumped analyst expectations in the past quarter with a strong cloud business. For the second quarter, the traditional IT company announced yesterday after the stock market closed a three percent increase in sales of 18.75 billion dollars. Analysts had expected an increase to just under $ 18.3 billion. In the cloud segment, the increase was 13 percent. Net income, however, fell to $ 1.33 billion from $ 1.36 billion in the same period last year. The IBM share reacted to this with price gains of almost four percent.
ProSiebenSat.1 with higher forecast
On the German stock market, the shares of the media group ProSiebenSat.1 should get more attention today. The group has again increased its forecast for the current year. Adjusted for portfolio changes, sales should increase by nine to eleven percent to 4.4 to 4.5 billion euros in the current year. Previously, the group had promised 4.25 to 4.45 billion. The media group also wants to do better than planned in terms of earnings. ProSiebenSat.1 now expects the adjusted operating result to be around EUR 820 million plus / minus EUR 20 million (previously: EUR 750 million to EUR 800 million), which would be an average of 16 percent more than in the previous year. The group had already raised its targets in May.