market report
The German standard stocks started trading cautiously in the middle of the week. But the parallels to the strong stock year 2019 are still amazing. This gives investors hope for further price gains in the DAX.
The DAX initially just failed at the hurdle of 16,000 points in early trading. At the start of trading on XETRA, the German standard values rose slightly to 15,998 points. The leading index continues to defy all adversities and bravely defends its annual gain of around 15 percent, notes analyst Thomas Altmann from QC Partners. Few investors see any reason to take profits.
From a technical perspective, the DAX is keeping an eye on the old all-time high of 16,290 points and the most recent record high of 16,322 points. A comparison with 2019 fuels hope that these marks will be approached again soon. Jörg Scherer, Head of Technical Analysis at HSBC, sees major parallels both in terms of the strong start to the year and the price declines in March and May. “Should the blueprint actually be correct, the share barometer could continue to rise until July,” predicts the HSBC expert.
Ongoing speculation about the future course of the central banks on both sides of the Atlantic should, however, prevent major price swings for the time being. Both the US Federal Reserve and the European Central Bank will meet next week. Investors are wondering whether the Fed will only briefly interrupt its rate hike cycle or whether it will take a longer pause.
The approaching US interest rate decision kept Wall Street locked in a tight trading range again yesterday. The US standard value index Dow Jones closed almost unchanged at 33,573 points. The tech-heavy Nasdaq advanced 0.4 percent to 13,276 points. The broad S&P 500 gained 0.2 percent to 4283 points.
Negative targets for DAX trading come from the Asian stock markets. The Japanese Nikkei, which comprises 225 stocks, was 1.8 percent lower at 31,913 points at the close of trading in Tokyo. The Shanghai Stock Exchange advanced 0.1 percent. The index of the most important companies in Shanghai and Shenzhen lost 0.4 percent.
Chinese exports, which had unexpectedly plummeted in May, caused disillusionment among investors. Exports from the People’s Republic fell by 7.5 percent year-on-year in the past month, as reported by the customs administration in Beijing. This shows once again that China’s economy is not gaining momentum despite the lifting of the strict corona restrictions in December.
German economic data also caused a disappointment in the morning. Although industrial production rose by 0.3 percent in April compared to March, it fell well short of economists’ expectations. “Without an upturn in demand, of which there are currently no signs, it is only a matter of time before companies will shut down production,” warns Commerzbank economist Ralph Solveen.
The euro eases slightly in early trading. In the morning, the common currency costs 1.0678 US dollars, slightly less than the previous evening. The European Central Bank (ECB) set the reference rate at $1.0683 yesterday afternoon. An ounce of gold is currently trading at $1960.
After the significant surcharges at the start of the week, oil prices tended to weaken again in the middle of the week. Disappointing economic data from China depressed the buying mood of oil investors. A barrel (159 liters) of North Sea Brent in the morning for delivery in August costs 75.79 US dollars. That’s 50 cents less than the day before.
In the DAX, the focus is on the Rheinmetall share in the morning. The armaments group wants to deliver more tanks and anti-aircraft ammunition to Ukraine this summer. The company announced yesterday at its production site in Unterlüß (Lower Saxony) that the Federal Ministry of Defense had received an order for 20 Marder infantry fighting vehicles. How much the tanks cost remains vague. We are talking about a mid-double-digit million euro amount.
Positive news came in the morning for network operators like E.ON. According to its president, the Federal Network Agency wants to grant electricity network operators higher returns. For investments in new systems, there could be a return on equity of around 7.09 percent in the future, wrote the President of the Authority, Klaus Müller, on Twitter.
The laboratory outfitter Stratec has expanded its US business through a takeover. The SDAX-listed company is acquiring Natech Plastics, a supplier with customers in medical technology, in-vitro diagnostics, life sciences and consumer goods, for a transaction price of USD 30 million. From 2024, a “neutral to slightly positive effect” can be expected from the takeover, it said.
The steel and processing group Voestalpine achieved record sales and operating results in the past 2022/23 financial year (as of the end of March). The bottom line, however, fell by 11.4 percent to 1.2 billion euros. Nevertheless, the shareholders are to receive a dividend of EUR 1.50 per share, which is 30 cents higher.
The US aircraft manufacturer Boeing has identified a new defect in its 787 Dreamliner long-haul jet plagued by a series of production errors. Boeing is currently investigating a number of aircraft not yet handed over to customers that may require rework prior to delivery. According to the current state of knowledge, however, the problem is not acutely relevant to safety and should initially not change anything in the delivery target for the year as a whole.
The US Securities and Exchange Commission has sued Coinbase, another major trading platform for digital currencies such as Bitcoin. Coinbase has offered for trading crypto assets that the SEC classifies as securities and which should have been registered by the company as such, according to the lawsuit filed in court in New York yesterday. Coinbase operates an illegal US securities trading exchange while also performing certain other financial services without the necessary licenses.