Market report
Status: 08/20/2021 7:52 a.m.
The DAX cannot make up any ground after its price slump yesterday. Hardly any investor dares to go out of cover – the fears that the market’s source of money could dry up are too heavy.
According to the calculations of banks and brokers, the DAX should start the last trading day of the week with slight losses below its previous day’s closing price (15,766 points). Yesterday, the German standard values rushed below 15,800 points right at the start of trading and closed 1.3 percent lower.
Was the record high a false breakout?
An attempt by buyers, also known as “cops” to regain this important breakout mark during the course of the day, failed. That burden weighs heavily now. The risk is high that the breakout to a new record high (16,030 points) a week ago today was a “bull trap” and thus a false breakout.
In order to limit the damage, the DAX bulls would now have to recapture the 15,800 point mark at least at the weekly closing price. Otherwise the technical outlook for the German benchmark index would deteriorate further.
The fear of the T-word
The background to yesterday’s DAX price slump was the rising number of corona infections and fears of a change in monetary policy by the US Federal Reserve (Fed). According to the minutes of the last Fed meeting published in the middle of the week, the US central bankers could start tapering this year. Many experts are already preparing for a start in September.
“Tapering” is the term used on the stock exchange to describe the shutdown of extensive bond purchases by the central bank. So when it comes to tapering, the Fed is gradually turning the tap on the markets.
The US stock exchanges have inconsistent requirements for DAX trading. The Dow Jones index of defaults went 0.2 percent lower at 34,894 points from trading. The broad S&P 500, on the other hand, gained 0.1 percent to 4405 points. The technology-heavy Nasdaq also advanced 0.1 percent to 14,541 points.
The fear of the Fed’s money locks gradually closing is also unsettling investors in Asia. The Nikkei, which comprises 225 values, has lost 0.8 percent to 27,055 positions at the hour. The Shanghai stock exchange is 1.7 percent in the red.
After its recent slide against the dollar, the euro can make up little ground in Asian foreign exchange trading. The European common currency is currently trading 0.1 percent higher at $ 1.1686.
The weakness of the euro is primarily a dollar strength. The “safe haven” US dollar remains in demand in view of the increased risk aversion of investors. The day before, the euro had fallen to $ 1.1666, its lowest level in nine months.
The gold price can benefit from investors fleeing to “safe havens”. In the morning the price of the yellow precious metal increases noticeably. The troy ounce of gold costs $ 1,786, 0.4 percent more than the day before.
Yesterday, the effect of the rising dollar still prevailed: a rising dollar makes the dollar-denominated raw materials outside the dollar area more expensive, which depresses the demand for gold on the world market.
After their recent decline, oil prices are starting to move in the opposite direction. The price of a barrel (159 liters) of the North Sea variety Brent rose by 0.4 percent to 66.74 dollars. A barrel of the US variety costs $ 64.09, which is 0.6 percent more.
On Thursday, oil prices fell to their lowest level since May. Here, too, the main reason was the strong dollar, as it makes oil more expensive in countries outside the dollar area and thus dampens demand.
The US government is starting a new attempt to break up the online giant Facebook in court. The trade authority FTC submitted a corresponding antitrust lawsuit on Thursday in a revised form. The responsible judge James Boasberg had rejected the first version in June on the grounds that the FTC had not provided sufficient evidence for an alleged monopoly of Facebook in the market for social networks.
Tesla CEO Elon Musk has announced the launch of the prototype of a humanoid robot called “Tesla Bot”. On the occasion of the “AI Day” organized by the company – an “Artificial Intelligence Day” (AI) – Musk spoke of the fact that the robot could take on dangerous, repetitive or boring tasks in the future. The robot with the human-like appearance would have a profound impact on the economy, Musk said.
The US pharmaceutical company Johnson & Johnson is preparing a change at the top of its board. Long-time chairman Alex Gorsky will vacate the post on January 3, 2022 and become the company’s managing director. His successor was Joaquin Duato, who, like Gorsky, has worked for the group for over three decades and has long been a member of the top management.
At the chip supplier Applied Materials, business is booming thanks to the strong demand for electronic devices in the corona pandemic. In the third fiscal quarter to August 1, the US group was able to more than double its net profit within a year to 1.72 billion dollars. Sales rose 41 percent to $ 6.2 billion.