Dax remains in the red after US inflation data.

dax curve

The leading German index is on a downward trend this year.

(Photo: Bloomberg Creative/Getty Images) [M])

Dusseldorf The latest inflation data from the US give stability to the German stock market. After the new data was released in the afternoon, the leading Dax index was still 0.5 percent lower at 14,123 points and also delisted at this point.

In the morning, the sell-off mood was still dominating the market. In early trading, the Dax fell as much as two percent and slipped below the 13,900 mark. Investors sold stocks and bonds alike, and the cryptocurrency Bitcoin was not spared either.

Prices in the US rose 8.5 percent in March compared to the same month last year. This is the highest level since late 1981 and slightly above market expectations. However, at 6.5 percent, core inflation is 0.1 percentage point below earlier forecasts. Allianz’s main economic adviser, Mohamed El-Erian, describes this as “a great relief for the markets”, as he wrote on Twitter.

Investors in bond markets initially reacted with relief to the new data: Prices rose and yields fell in return. Ten-year US bonds yielded 2.704 percent after hitting the 2.8 percent threshold in the morning. Two-year bonds yielded 2.4321 percent. The 10-year German bond yield, which had hit its highest level since 2015 at 0.8 percent, also fell slightly.

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Yields had risen significantly in recent weeks. As they are developed in the opposite way to the courses, there was a collapse in these papers, which are supposed to be a haven of security. Ten-year US bond prices fell from 101 percent to 91.89 percent during this period, a loss of more than nine percent in six weeks. Such development takes several years in normal times in the bond market.

At the same time, securities with short maturities sometimes delivered higher returns than those with longer maturities. That’s unusual because investors typically demand a higher return the longer they commit, and it’s thought to herald a recession.

But where does all the money go? The only beneficiaries at this time are gold and silver. The price of a troy ounce (31.1 grams) of the yellow precious metal is currently $1,973, while silver costs $25.53. The price of gold has thus moved out of its trading range that has existed since mid-March. Gold continues to defy rising bond yields and real interest rates.

“For most of them, the ‘Cash is King’ motto seems to apply at the moment,” says capital markets expert Thomas Altmann of asset manager QC Partners. That in turn gives hope. “Given the fact that there are still penalty interest rates for holding cash in the euro zone, this situation should not last long.”

Look at the individual values

Deutsche Bank/Commerzbank: After the US hedge fund Cerberus, the two German financial institutions are losing another big investor. On Monday night, the investment bank Morgan Stanley offered two blocks of shares of the two major banks, each of more than five percent, from the same investor. This is Capital Group. The packages should bring in a total of 1.75 billion euros.

According to the commissioned bank, 116 million shares of Deutsche Bank will be sold at a price of at least 10.98 euros, which is almost eight percent less than Xetra’s closing price on Monday. 72.5 million Commerzbank papers will be placed at 6.55 euros each, a good six percent below the closing price. The discount is relatively high, in many cases the discount is five percent.

Consequently, the price of the two shares fell significantly. Deutsche Bank shares fell 9.4 percent, Commerzbank shares 8.5 percent.

Defense actions: Armor values ​​were once again demanded by individual values. Shares in Italian arms group Leonardo rose as much as 4 percent. Deutsche Bank analysts upgraded the shares to a buy on expectations of higher defense spending in the company’s main markets. Investors also saw optimistic business prospects at Rheinmetall. The titles closed with a plus of three percent.

Evotech: The Hamburg biotech company grew significantly last year thanks to higher milestone payments from its partnerships. The stock lost 6.8 percent.

Dermapharm: The Group can look back on the most successful fiscal year in the company’s history. Sales and profits increased significantly. The newspaper gained 1.7 percent at times, but then gave back its gains: The stock was up 0.3 percent since trading. The drugmaker also intends to significantly increase last year’s dividend. The Board of Directors and the Supervisory Board propose a dividend of EUR 2.17 (previous year: EUR 0.88) per share.

Here you can go to the page with the Dax course, here you can find the current tops & flops on the Dax.


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