Market report
As of: 25.10.2021 9:54 a.m.
The DAX got off to a rather unspectacular start to the new stock market week. Meanwhile, things are more dramatic on the foreign exchange market: There the Turkish lira is falling to new record lows against the euro and the dollar.
The DAX started trading on XETRA with a small premium. At the opening, the 40 German standard values posted an increase of 0.2 percent to 15,581 points.
After overcoming the 38-day line (currently at 15,470 points), a spurt above the highs of the last two weeks at 15,599 / 15,615 points would be necessary to give the DAX rally new impetus.
Meanwhile, dramatic scenes are playing out on the foreign exchange market. The Turkish lira is under massive pressure at the beginning of the week. Against the euro and the dollar, the currency fell again to record lows.
After the unexpectedly sharp interest rate cut by the Turkish central bank on Thursday, there is now a political aspect as an additional negative factor: President Erdogan has declared the ambassadors of Germany, the USA and eight other Western countries to be undesirable.
The analysts at LBBW fear that the current developments could lead to a further deterioration in the already very fragile economic situation in Turkey. Commerzbank foreign exchange expert Ulrich Leuchtmann speaks of a “further blow” against the lira.
The euro is trending up slightly against the dollar in the morning. One euro currently costs 1.1644 dollars, 0.1 percent more than the day before. In the further course of trading, the ifo index could still cause movement on the currency and stock markets.
Another clouding is expected. Most recently, the major disruptions in international trade in goods had caused great uncertainty.
The Bundesbank’s monthly report for October will also be published at 12 noon. At 2:30 p.m. in the US, the focus is on the Chicago Fed National Activity Index for September.
Meanwhile, the continuation of the US reporting season is causing restraint among investors at the beginning of the week. In the course of the week, numerous tech giants such as Microsoft, Facebook, Apple and Google parent Alphabet will present their quarterly figures. In addition, some European financial giants such as Deutsche Bank, Lloyds and HSBC can be seen in the books.
The forecasts of numerous economists also have what it takes to lower the buying mood on the German stock market. “The German economy will have to dress warmly in the coming months,” said Katharina Utermöhl from the Allianz Group in a survey by the German Press Agency.
Marc Schattenberg from Deutsche Bank Research sees no rapid recovery, primarily because of the high energy prices and global delivery bottlenecks, for example for microchips. “No significant relaxation is expected before the end of spring 2022.”
In the morning, the German export figures to non-EU countries caused another disappointment: exports to third countries fell by 0.4 percent compared to August, calendar and seasonally adjusted. In June, July and August, exports to third countries had already fallen compared to the previous month.
Last but not least, the next 30-day grace period for an interest payment from the highly indebted Chinese real estate company Evergrande, which was actually due on September 30, expires in the course of the week.
This means that the trembling and fear of investors about the further fate of the Chinese real estate company and its effects on the global financial markets is likely to continue for the time being.
In the morning, the Asian stock exchanges provided mixed guidelines for German stock trading. The Nikkei index, which comprises 225 values, was 0.7 percent lower at 28,600 points at the close of trading in Tokyo.
In contrast, the Shanghai stock exchange held up better with an increase of 0.4 percent. The index of the major companies in Shanghai and Shenzhen stagnated.
Cautious guidelines come from Wall Street. Both the US leading index Dow Jones Industrial and the market-wide S&P 500 were able to set new highs in early trading on Friday.
But the S&P 500 turned into the red and ultimately closed 0.1 percent lower at 4545 points. The Dow Jones went out of trading with a plus of 0.2 percent to 35,667 points.
The technology-heavy Nasdaq 100 lost 0.9 percent to 15,355 points. The quarterly figures published the evening before by Intel and Snap dampened the buying mood of investors.
Stress also came from current statements by US Federal Reserve Chairman Jerome Powell, who once again signaled the beginning of an exit from the loose monetary policy. “We are well on our way to begin reducing our bond purchases,” said Powell.
The ongoing supply bottlenecks are driving oil prices further. At the start of the new week, Brent and WTI hit new multi-year highs. While the price of North Sea oil has risen to its highest level in about three years, the US oil price is now higher than it has been in about seven years.
The OPEC + oil network is constantly expanding its production. However, according to experts, the increasing supply cannot keep pace with the high demand due to the economic situation.
The gold price scratches the $ 1,800 mark in the morning, and has even peeked at it once. At the hour, a troy ounce of the yellow precious metal costs $ 1,796, 0.1 percent more than the day before.
In the takeover battle for online pet supplies retailer Zooplus, investors EQT and Hellman & Friedman joined forces and increased their offer to 480 euros per share. That is ten euros more than before. In the morning, Zooplus supported the partner’s improved and final offer.
The major British bank HSBC continued to benefit from a significantly better situation for bad loans in the third quarter. The pre-tax profit, adjusted for one-off effects, rose by 36 percent to around six billion dollars, said the Asia-focused bank in London. HSBC thus significantly exceeded the forecasts of the experts surveyed by Bloomberg.
Negotiations between the Italian government and UniCredit to sell the ailing Monte dei Paschi di Siena have failed. Despite the efforts of both sides, the negotiations would not continue, it said in a statement published on Sunday. The several hundred year old Monte dei Paschi is considered to be the largest restructuring case in the Italian banking sector.
The US Food and Drug Administration has for the first time evaluated the safety and effectiveness of Pfizer and BioNTech’s coronavirus vaccine for children ages five to eleven and found that the benefits outweigh the risks in this age group.
The FDA also released data from Pfizer that the vaccine was 90.7 percent effective against Covid-19 in a clinical study involving five to eleven year olds. The results could help the FDA approve the vaccine for children. A committee of experts from the authority wants to vote on Tuesday whether it recommends approval.