2023-07-07 14:30:00
market report
After the sell-off of the previous day, the DAX is now on course for recovery. Meanwhile, investors have been spared a new shock from the US job market. Nevertheless, a big weekly minus threatens.
Even following the publication of new data from the US labor market in the followingnoon, the leading German index held its ground and increased by around 0.5 percent in the followingnoon. The DAX had already changed its sign in the morning following falling to a daily low of 15,456 points. Nevertheless, following four trading days with heavy losses, the stock index is heading for a heavy weekly loss of currently around 3.5 percent.
Yesterday the DAX fell by 2.6 percent to 15,528 points following massive interest rate fears, not least because of very robust data from the US labor market, which fueled these fears. The renewed trade conflict between the USA and China might also have a fundamental impact on the stock market, says Salah-Eddine Bouhmidi from the financial services provider IG.
Yesterday’s price slide in the DAX is also worrying chart-oriented analysts following the support zone at 15,600/15,700 points was broken. According to the HSBC experts, the stock index would have to recapture this “key zone” as soon as possible in order to avert the negative implications. “Otherwise the DAX is threatened with a real summer dent.”
However, the market seems to have been spared the fate of further price losses, at least for today. The topic of the day is the new data from the US labor market, known in technical jargon as “pay rolls”. Investors’ enthusiasm regarding the somewhat worse-than-expected data in June was limited. Even the new figures do not provide any real information as to whether the interest rate peak in the USA has already been reached.
Specifically, US companies created fewer jobs in June than expected. In the United States, 209,000 new non-agricultural jobs were added, as the government in Washington announced in the followingnoon. However, economists surveyed had expected 225,000 new jobs. As expected, the separately calculated unemployment rate fell slightly in June to 3.6 percent from 3.7 percent in May.
Average hourly wages increased by 0.4 percent month-on-month. Economists had expected an average increase of just 0.3 percent. Compared to the same month last year, hourly wages increased by 4.4 percent. This increase is also stronger than expected.
“The US labor market cannot meet the high expectations. Despite the disappointing number of newly created jobs, there is still no sign of a real slowdown in the labor market,” comments Ralf Schweden from Helaba. “Job growth remains solid and the unemployment rate is low, while wage increases are decent and the annual rate has even increased. The Fed will therefore stick to the announced rate hike at the end of the month and keep all options open depending on the data development.”
Also on the New York Stock Exchange no enthusiasm wants to arise. Somewhat higher pre-market indications have meanwhile been lost once more. The major stock indices are moving slightly above their closing prices around half an hour following the open, with movements being small overall.
According to the chief market strategist at Barclays Private Bank, Julien Lafargue, a slightly positive surprise job report had been priced into share prices the day before. US markets came under pressure on Thursday following data showed the private sector added significantly more jobs than expected in June. A mood survey among buyers in the US service sector in June also exceeded expectations.
Shares in Facebook parent Meta open moderately weaker on the Nasdaq. As on the previous day, all eyes are on the company following a competitor app to the short message service Twitter was published under the name Threads, which soon had more than ten million users.
According to a media report, Twitter is threatening the Facebook group with a lawsuit. However, this might hardly affect the papers of the social media group, they were up half a percent before the market.
The shared currency is gaining on the US jobs data and is currently trading at $1.0919, the daily high. Rather disappointing data on German production in May had previously hardly moved the market.
The data from the labor market are of great importance for the monetary policy course of the Federal Reserve (Fed) and are also closely followed on the foreign exchange market. The Fed sees inflationary risks in the comparatively low unemployment rate because the lack of workers strengthens their position in wage negotiations.
Each “weaker” number from the labor market therefore lowers the rate hike scenario for the dollar in the eyes of market participants and vice versa. However, the ECB is also facing another rate hike in July, which will support the euro.
Concerns regarding interest rates are being joined by increasingly serious economic problems in Germany: German companies surprisingly reduced their production in May. According to the Federal Statistical Office, industry, construction and energy suppliers together produced 0.2 percent less than in the previous month. Interviewed economists had expected stagnation. The construction industry in particular is weakening as a result of high material prices and interest rates.
Thyssenkrupp Nucera shares rose significantly when the hydrogen plant manufacturer made its stock market debut. The first course on the Frankfurt stock exchange was 20.20 euros in the morning, meanwhile more than 23 euros are being paid, an increase of more than 17 percent.
The shares were issued at 20 euros, roughly in the middle of the subscription range. 39 percent of the issue volume of 605 million euros went to the two anchor investors, a fund of the French bank BNP Paribas and the Saudi Arabian sovereign wealth fund PIF. These papers are therefore not available for trading for the time being. In fact, only regarding 15 percent of Nucera shares are in free float.
BASF (and also Covestro) gain over four and 2.4 percent respectively – despite a profit warning from competitor Clariant. According to experts, speculators had tried to profit with short sales following similar warnings in the chemical industry. However, the bet no longer works out, so corresponding short bets are also being canceled at BASF. The share of the DAX group had fallen significantly in the past few days.
A management task force and a special committee of the supervisory board are to help Siemens Energy get a grip on the ongoing problems with its wind power business. The special committee met yesterday evening for its first meeting, the dpa news agency quoted as saying from supervisory board circles. According to reports, his task is to monitor the processing of the quality problems with wind turbines, for which Siemens Energy had to withdraw its forecast at the end of June.
The delivery figures at Airbus, the world’s largest aircraft manufacturer, continue to develop positively. The DAX group announced that 72 machines were delivered in June. That is more than in any other month so far this year. Airbus delivered 316 aircraft in the first six months. In order to reach the target of 720 aircraft in 2023, deliveries in the second half of the year must therefore remain at around the June level.
Due to losses in the important chip division, Samsung’s consolidated profit fell by 96 percent to 600 billion won (regarding 420 million euros) in the period from April to June. This is the lowest quarterly profit in 14 years, according to Samsung. Last year, the company reported a profit of 14.1 trillion won ($9.8 billion) in the same period. Sales are expected to have fallen 22 percent year-on-year to 60 trillion won, according to Samsung.
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