Status: 03/06/2023 10:03 a.m
At the start of the week, the DAX is robust and remains at a high level. Above all, investors are hoping for impulses from China after the end of the corona restrictions.
At the start of the week, the domestic stock market is robust. At the opening, the DAX added a little more to its course fireworks from Friday and is trading around the 15,600 point mark. He is also targeting his high for the year at 15,658 points.
In any case, major profit-taking after the most recent interim spurt is not in sight, which means that the DAX still does not allow itself to be weak despite continuously rising key interest rates and high geostrategic risks. In the previous week, the DAX had gained almost two and a half percent after a four-week low of 15,150 points.
Good international guidelines also provide momentum for day-to-day business. Both Wall Street on Friday and today’s Asian markets rose, supporting European listings. The Tokyo Nikkei index advanced 1.1 percent to 28,237 points.
Among the individual values on the domestic price list, the focus is on the Rheinmetall share, which will be included in the DAX on March 20 for the dialysis specialist Fresenius Medical Care. Deutsche Börse announced the changes in its indices on Friday evening. The shares of the armaments group and automotive supplier have gained around 80 percent in value in the last six months.
The focus is on China
Fundamentally, the markets are currently caught between persistent interest rate fears and hopes that the Chinese economy will pick up again after the end of the corona restrictions. Despite persistently high inflation and therefore increasing concerns about interest rates, the DAX had recently shown itself to be robust. However, inflationary pressures in the euro zone remain in the back of investors’ minds, especially as the European Central Bank (ECB) has already announced further rate hikes.
“Inflation and inflation again and again,” wrote Ulrich Kater, chief economist at Dekabank. He pointed out the danger of a wage-price spiral. Investors are eagerly awaiting the US labor market report on Friday, which is important for the monetary policy of the US Federal Reserve.
However, there was some disappointment in the markets in China that the Beijing government at the country’s current People’s Congress downgraded its growth outlook to a target of 5 percent instead of the 5.5 percent or more favored by the market. The Shanghai stock exchange was recently 0.2 percent in the red. The index of the most important companies in Shanghai and Shenzhen lost 0.1 percent.
Statements by the US monetary officer Raphael Bostic on Friday evening brought relief to the world‘s leading stock exchange in New York. The president of the Atlanta branch of the US Federal Reserve Bank favors a slow and steady course for the US Federal Reserve with rate hikes of 25 basis points “as the effects of the higher interest rates could only be felt in the spring”. A measured approach reduces the likelihood that the Fed will overshoot interest rates and hurt the economy.
The leading index Dow Jones gained almost 1.2 percent to 33,390 points. Meanwhile, futures on the major US indices are slightly higher in European trading this morning.
The euro started the week with gains. In the morning, the common currency is trading at $1.0649, slightly higher than before the weekend. The ECB set the reference rate at $1.0615 on Friday afternoon.
Today’s agenda for economic data includes retail sales from the EU in the morning and January orders from the USA in the afternoon.
Oil prices eased slightly at the start of the week. In the morning, a barrel (159 liters) of North Sea Brent costs around 0.3 percent less. The price for a barrel of the American variety West Texas Intermediate (WTI) for April delivery fell slightly by 0.1 percent.
The new growth target for China, which was met with disappointment on the markets, caused some strain at the start of the week. As the second largest economy in the world, the People’s Republic is also one of the largest energy consumers.
Notwithstanding the recent discounts, oil prices continue to struggle to find a clear direction. Prices have been in a comparatively narrow range of around ten dollars for several weeks. Experts cite opposing forces on the markets as the reason, neither of which can gain the upper hand.
Lufthansa shares are in demand on the MDAX after several analysts made positive comments on the latest business figures. The experts unanimously raised their price targets, but do not always agree on the fundamental assessment of the share. The range of fair values fluctuates between EUR 7.20 and EUR 14.50. The fact is, the stock has risen about 70 percent in the last five months.
Software AG intends to pay out significantly less dividends for the past fiscal year than experts had expected. The company announced on Friday evening in Darmstadt that an amount of five cents per share will be proposed to the general meeting. In 2021, 76 cents were still being paid. Analysts had previously expected 74 cents. Following the latest index changes by Deutsche Börse, the company’s shares will be relegated from the MDAX to the SDAX on March 20.
Major shareholder exits Credit Suisse
Long-time Credit Suisse shareholder Harris Associates has left the crisis-ridden Swiss bank completely. Harris began reducing the stake in October and has now completely separated from it, Harris vice chairman David Herro told the Financial Times on Sunday. According to the newspaper, Harris owned up to 10 percent of the bank’s shares last year. “It’s a question of the future of the business. There have been big outflows from wealth management,” Herro said.
Swiss National Bank with a big loss
The Swiss National Bank (SNB) closed last year with a record loss of CHF 132.5 billion. The central bank thus confirmed the preliminary earnings figures published in January. In 2021, the SNB had reported a profit of CHF 26.3 billion. Because of the immense shortfall, the central bank will not pay out any money to the federal government and cantons, after they received a contribution of six billion francs for their budgets last year.
Falling share and bond prices and the appreciation of the Swiss franc were responsible for the largest loss in the central bank’s 115-year history. The loss on the huge foreign currency holdings, which include shares and bonds from abroad, was CHF 131.5 billion. For years, the central bank had bought euros and other foreign currencies in order to prevent an economically damaging appreciation of the franc, which was in demand as a safe haven in times of crisis.