market report
Status: 11/21/2022 09:59 am
The DAX started the new trading week with losses. The air for the leading German index is getting thinner and thinner. Is the autumn rally now coming to an end?
The DAX begins the week after the small expiration day with gentle price losses. Shortly after the stock exchange opened, the leading index recorded a minus of 0.3 percent to 14,386 points. Last Friday, the DAX still had hit a five-month high at 14,457 points.
With the small expiry date, however, an important market shakeout has now taken place. Because on this day, the players on the futures market have closed their long and short positions. In the past, expiration days were often important turning points for the stock market, significant highs and lows were marked around them.
Will the year-end rally in the DAX fail?
Jochen Stanzl, analyst at broker CMC Markets, believes that the leading German index still has further upside potential: “The upward trend in the DAX is intact. Despite numerous indicators showing an overbought market, there is no sign of a trend reversal.”
Meanwhile, IG analyst Christian Henke points out that the statistically strong market phase of the autumn rally will end tomorrow. “After that, things could get a little more uncomfortable on the Frankfurt stock exchange floor. In the so-called mid-election years, the DAX tends to be weak. The very popular year-end rally has not happened in the past.”
Growing concerns about China
It is also questionable how long investors in Germany can continue to ignore the growing concerns about China. In China, the number of cases of corona infection is increasing, and at the weekend there was the first death in connection with corona in about six months. Lockdowns were imposed again in the metropolitan areas of Guangzhou and Beijing.
This puts a severe damper on the recently germinated hopes of an early relaxation of the strict pandemic restrictions. China’s strict anti-corona course is considered one of the greatest risks to global economic growth.
Producer price inflation on the decline
Meanwhile, slight signs of relaxation are coming from the German inflation front. Producer prices fell by 4.2 percent in October compared to September. This was the first month-on-month price decline since May 2020.
Compared to the same month last year, the price increase was 34.5 percent after 45.8 percent in August and September. The rise in prices at the producer level – an important leading indicator for the development of consumer prices – has therefore slowed down.
Dow investors brush interest rate worries aside
On Wall Street, bargain hunters used the price declines of the past few days to get started at the end of the week. The Dow Jones gained 0.6 percent on Friday to 33,746 points. The tech-heavy Nasdaq was little changed at 11,146 and the broader S&P 500 was up 0.5 percent to 3,965. “Stocks are once again shedding warnings of rising interest rates in the US,” said Chris Beauchamp, chief market analyst at brokerage firm IG.
China worries weigh on Asian stock exchanges, Tokyo stable
The resurgence of the coronavirus pandemic in China pushed most Asian stock markets into the red at the beginning of the week. The Shanghai and Hong Kong stock exchanges fell 0.4 percent to 3,084 points and 1.8 percent to 17,677 points, respectively. The Japanese Nikkei index, on the other hand, was just slightly up at 27,945.
Euro and gold with price losses
Dollar shows renewed strength in early forex trading to start the week. At the same time, the euro fell by 0.6 percent to $1.0265. The resurgent dollar weighs on the price of gold. The troy ounce of gold fell 0.2 percent to $ 1,742 in the morning.
Corona worries weigh on crude oil
An imminent decline in demand from top buyer China is pushing down raw material prices. Brent crude oil from the North Sea fell in the morning by more than half a percent to $87.11 a barrel. These speculations were fueled by the increasing number of coronavirus cases in the People’s Republic, which the government is countering with strict lockdowns.
Bitcoin and Ethereum lower again
The collapse of the cryptocurrency exchange FTX pushes the prices of Bitcoin and Ethereum back into the red. Bitcoin is down three percent to $16,128, Ethereum is down 6.5 percent to $1129. “The fear that more crypto companies could collapse in the coming days and weeks still dominates,” says analyst Timo Emden of Emden Research. Some companies have already gone into a tailspin.
Commerzbank wants Weidmann as head of the supervisory board
On the German stock market, the focus is on the Commerzbank share. Former Bundesbank President Jens Weidmann (54) is to take over the post of chief controller after the general meeting on May 31, 2023, the Frankfurt MDAX group surprisingly announced. The incumbent chairman of the supervisory board, Helmut Gottschalk (71), will no longer stand as a candidate for reasons of age.
Price target increases give Rheinmetall tailwind
Positive analyst comments lift Rheinmetall to the top of the MDAX. The shares of the armaments group and auto supplier rise by more than two percent. The experts at HSBC increased the price target for the title to EUR 244 from EUR 242 and their colleagues from Berenberg Bank to EUR 240 from EUR 220.
Borussia Dortmund shareholders meet again on site
For the first time since 2019, the shareholders of Borussia Dortmund are meeting again today for the Annual General Meeting in the Westfalenhalle. The pandemic has hit the Bundesliga soccer club hard. After seasons with an empty stadium or only partially filled with spectators, Borussia Dortmund KGaA recorded a loss of 35 million euros on sales of 456.8 euros in the 2021/2022 financial year (as of June 30).
Software provider Suse sees a strong final spurt
According to its own statements, the Linux software specialist Suse developed strongly in the fourth quarter of the year. The earnings margin before interest, taxes, depreciation and amortization adjusted for special effects is likely to have reached a value of between 36 and 37 percent in the 2021/22 financial year (end of October). Suse boss Melissa Di Donato had set a target in the mid-thirties percentage range.
At Disney, a pensioner is doing it now
Walt Disney brings in its former CEO Bob Iger back from retirement. Iger, who retired in late 2021 after 15 years as the company’s CEO, has agreed to serve as CEO for two more years, Disney said. It was said that his successor, Bob Chapek, had resigned. Chapek had disappointed investors with ongoing losses on the Disney+ streaming service.
Is Trump Returning to Twitter Now?
Ex-President Donald Trump, who is the focus of various investigations and wants to go back to the White House, has regained access to a large online platform. Twitter owner Elon Musk left over the weekend Unlock Trump’s account suspended since January 2021. Trump did not comment on whether he intends to return to Twitter.
Buffett’s Berkshire Hathaway is buying in Japan
The US conglomerate Berkshire Hathaway of investor legend Warren Buffett is increasing its stake in the five largest Japanese trading houses. Berkshire’s holdings in Mitsubishi, Mitsui, Itochu, Marubeni and Sumitomo each rose more than a percentage point to over 6 percent, according to the company’s IPO filings.
Julius Baer attracts more client funds
Private bank Julius Baer has brought in more net new money in the first ten months and is on course to meet its full-year targets. Since the beginning of the year, customers have entrusted Baer with three billion francs in new money, as the Swiss asset manager announced. The significant improvement in net new money inflows, which began towards the end of the first half of the year, continued from July to October.