Price gains ahead: DAX shows resilience

market report

Status: 03/27/2023 08:02 a.m

The DAX should try to stabilize at the beginning of the week. The focus of investors is the round mark of 15,000 points. But the mood in the banking sector remains tense.

After the recent price slide on Friday, the German stock market calmed down again at the beginning of the new stock market week. Good targets from Wall Street should push the DAX above the psychologically important mark of 15,000 points right at the start of trading. The broker IG assessed the German stock exchange barometer at the hour 0.8 percent higher at 15,084 points.

DAX back in key zone

In view of the latest banking problems and interest rate hikes on both sides of the Atlantic, the leading German index remains surprisingly robust. From a technical perspective, the DAX had set a negative course on Friday by closing the upward price gap at 14,980/15,056 points. After all, the key zone could be defended at 14,800/15,000 points at the end of the week.

Tension rises ahead of ifo index

From an economic point of view, the ifo business climate index should be watched with eagle eyes today. Economists polled by Reuters expect the indicator to fall slightly to 90.9 from February’s 91.1. The recent turbulence in the banking sector should put a damper on the mood. This was already evident in the ZEW Index, which measures the mood of stock market professionals. The economic prospects are considered to be rather meager anyway: The Bundesbank, for example, is expecting a recession due to persistently high inflation.

Bank CDS still in focus

At the end of the week, a price drop in Deutsche Bank titles caused unrest. At the same time, the cost of Deutsche Bank’s credit default swaps (CDS) rose sharply on Friday. “If these CDS don’t normalize, there’s a good chance the stock market will suffer for many more days,” said Naeem Aslam, chief investment officer at Zaye Capital Markets.

Differences to the 2008 financial crisis

Experts have recently repeatedly emphasized that the systemic risk is now significantly limited compared to the 2008 financial crisis. After all, the banks’ capital base has clearly improved since then, and the central banks were also immediately available and acted with commitment. Nevertheless, equity strategist Uwe Streich from Landesbank Baden-Württemberg does not rule out the possibility that, after Credit Suisse, another financial institution could soon have problems.

Fed fears credit crunch

The problems in the banking industry and the possibility of a credit crunch meanwhile increase the probability of a recession according to a US central banker. “This definitely brings us closer,” Minneapolis Fed President Neel Kashkari told CBS on Sunday. “It is unclear to us how much this bank stress will lead to a large-scale credit crunch. This credit crunch … would then slow down the economy. We are monitoring that very, very closely.”

Wall Street is stabilizing

Positive indications from Wall Street give tailwind to the European stock markets at the beginning of the week. In the morning, the future of the leading index Dow Jones is 0.4 percent higher. On Friday, investors on the US stock exchanges mainly focused on energy and consumer stocks, which supported the overall market. The Dow Jones gained 0.4 percent to 32,237 points. The tech-heavy Nasdaq advanced 0.3 percent to 11,823 points, while the broad-based S&P 500 gained 0.6 percent to 3,970 points.

Bank worries cap profits in Japan

Ongoing worries about a global banking crisis weighed on financial stocks at the start of the week and limited gains in Asian markets. However, a weaker yen brightened the mood in export-heavy Japan. The Nikkei Index is up 0.5 percent just before the Tokyo close. The Shanghai stock exchange, on the other hand, is down 1.0 percent. The index of the most important companies in Shanghai and Shenzhen lost 0.8 percent.

Gold price remains in wait

The euro fell 0.1 percent to $1.0765 in Asian forex trading. The price of gold fell slightly to $1,973 per troy ounce. In the past week, the price of the precious metal has temporarily risen above the $ 2,000 mark.

Does Volkswagen’s software unit have to save Cariad?

Among the individual values ​​in the DAX, the focus is on the VW share in the morning. After the problems in software development, the Volkswagen subsidiary Cariad has to save a three-digit million amount, according to a newspaper report. Accordingly, the cost program should be on a list of internal goals and part of a larger performance program within the VW Group, reported the “Handelsblatt”, citing group circles.

Tesla produces 5,000 cars a week in Grünheide

The US electric car manufacturer Tesla has reached half of its first production target in Germany. In the plant in Grünheide near Berlin, 5,000 cars per week are now being produced, Tesla announced on Twitter on Saturday evening. This corresponds to around 250,000 vehicles per year. In the first expansion stage, the company wants to roll off the production line 500,000 cars a year, i.e. around 10,000 a week.

Musk puts the value of Twitter at $20 billion

Tech entrepreneur Elon Musk has put Twitter’s current value at $20 billion – less than half of the $44 billion he paid six months ago when he took over the short message service. According to an internal email, Twitter is said to have been on the brink of bankruptcy at times. Meanwhile, parts of Twitter’s software code had been openly visible on the Internet as a result of an unusually serious data leak.

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