Status: 04/08/2022 09:43 am
Sobering has recently established itself on the German stock market. However, the DAX dared to try a new recovery at the end of the week. But the risk of failure is high.
At the start of trading on XETRA, the DAX “bulls” once again stood out: the German stock market barometer made a big jump and opened 1.4 percent higher at 14,276 points. It is the transparent attempt to bring the DAX back to safer and calmer waters after the recent turmoil. But can that work? Experts remain skeptical.
DAX is technically sick
“For a long time, the current negative factors were brushed aside. But now they have brought investors back to earth. The recovery came to an abrupt end,” says Christian Henke, analyst at IG, describing the latest developments in the German stock market.
Since their peak recovery of 14,925 points at the end of March, German standard values have lost around 900 points at their peak. The DAX is technically sick. If today’s rally attempt also fails, investors should be prepared for a test of the psychologically significant 14,000 mark. Just above it is Wednesday’s provisional weekly low at 14,027 points.
Investors caught between fear of war and concern about interest rates
From a fundamental perspective, it is not just uncertainties about the economic fallout from the Ukraine war and potential new Western sanctions that are weighing on share prices.
In addition, there are massive interest rate fears on the part of investors, which appear to be well-founded, as a look at the Fed’s minutes released in mid-week shows: According to this, the U.S. Bank of America’s upcoming meetings the Federal Reserve. Also, the Fed wants to reduce its total assets starting in May.
This “would deprive stock markets of liquidity, which was responsible for the bull market in recent years,” emphasizes the IG Henke expert. At the same time, investment alternatives such as government bonds would become more attractive.
Only slight gains in the Dow
The prospect of a rise in interest rates again weighed on US stock markets yesterday. In New York, stock “bulls” managed only a slight counter-movement. The Dow Jones Standard Stock Index closed 0.3 percent higher at 34,583 points. The tech-heavy Nasdaq advanced 0.1 percent to 13,897 points. “The market is cautious,” said Robert Pavlik, portfolio manager at wealth manager Dakota Wealth Management.
Buffett acquisition boosts HP stock
Shares of HP, on the other hand, stood out positively with a plus of 14.7 percent. Warren Buffett’s holding company, Berkshire Hathaway, announced it had bought nearly 121 million shares in the personal computing and printing company for $4.2 billion.
Interest rate and geopolitical risks cap Nikkei gains
The prospect of aggressive global rate hikes also gave Asian investors pause. The Nikkei index and the broader Topix index rose 0.4 percent and 0.2 percent, respectively. “The past two decades have seen low inflation and a relatively peaceful world. In the future, geopolitical conflicts could become increasingly volatile and have a greater impact on the overall global economy,” said Lirong Xu, chief investment officer at Franklin Templeton Sealand Fund Management in Shanghai.
Oil prices: Brent at $100
Oil prices recovered somewhat from the previous day’s losses in early trading. In the morning, a barrel (159 liters) of North Sea Brent was $100.90. That was 32 cents more than yesterday. The price of a US barrel of West Texas Intermediate (WTI) grade rose by a similar amount to $96.37.
The International Energy Agency (IEA) released another 120 million barrels of crude oil reserves last night in a bid to ease the impact of Russia’s war against Ukraine on markets. In a first step, the IEA released 62.7 million barrels of crude in early March.
The euro lags behind the dollar
The prospect of a rapid rise in interest rates in the US gives the dollar another tailwind at the end of the week. The dollar index has hit the psychologically important 100-point mark for the first time in almost two years.
It increases at the top by 0.2 percent to 99.91 jobs. In turn, the euro fell to a one-month low of $1.0854 against the dollar. An ounce of gold costs $1,929.
Postmaster Appel is the new chairman of the supervisory board of Telekom
Deutsche Post’s current CEO, Frank Appel, was elected as the new chairman of the supervisory board at Deutsche Telekom’s general meeting yesterday. Previously, institutional shareholder protectors had harshly criticized the 60-year-old Postmaster’s election for piling up posts and announced they would vote against him.
Formula 1 drivers welcome Audi and Porsche plans
Record world champion Lewis Hamilton and reigning champion Max Verstappen have both welcomed Audi and Porsche’s Formula 1 plans. “It’s great that we have new manufacturers in our sport. It’s great that we are evolving. We welcome them,” said Mercedes star Hamilton. The board of directors and the supervisory board of Volkswagen AG, Porsche AG and Audi AG yesterday confirmed “the plans of the two group brands for a possible entry into Formula 1”.
Ritter, former co-boss of Zalando, received 89 million euros
The probably highest paid boss of a DAX company in 2021 will be private from June. In his last year at the helm of the fashion mail-order company Zalando, Rubin Ritter received a remuneration of 89 million euros, according to the annual report. Most of this relates to stock options Ritter received in 2011, 2013 and 2014, most of it before Zalando went public.
Scout24 jumps after takeover speculation
The takeover speculation puts the spotlight on Scout24’s shares. Online real estate market shares rose 17.5 percent. the news agency Bloomberg reported, referring to “Dealreporter” market watchers, that investors Hellman & Friedman, EQT and Permira have their eyes on Scout24 and are considering an offer. Cinven and CVC are also interested.
Another millionaire payment to Evotec
The Evotec stock is one of the most sought after stocks on the MDAX. The biotech company announced in the morning that another research program had been selected in the existing cooperation in neurology with Bristol-Myers Squibb (BMS). This triggers an additional payment of $16 million to Evotec. Evotec and BMS are working on approaches to treat neurodegenerative diseases, including Alzheimer’s disease.
Tesla opens second US plant in Texas
Just a few weeks after the start-up of the Grünheide plant, the electric car manufacturer Tesla is expanding its capacity with a second US factory in Texas. The Austin facility will initially build the Model Y compact SUV, which also rolls off the assembly line in Brandenburg. Production of the Cybertruck pickup is also scheduled to begin in Texas next year. In addition to finished vehicles, the plant also produces batteries.
Depreciation in Russia weighs on OMV
Viennese oil, gas and chemicals group OMV is struggling with billions in write-downs due to its business in Russia. In connection with the halted Nord Stream 2 Baltic Sea pipeline, OMV wrote off one billion euros. Furthermore, the two Russian companies through which OMV owns nearly 25 percent of the Yuzhno Russkoye gas field would no longer be consolidated. Together with write-downs on gas field reserves, this will weigh on operating income in the first quarter by an additional €1bn.