2023-06-08 07:41:07
market report
It is by no means certain that the Federal Reserve will actually pause interest rates. More and more investors expect the US Federal Reserve to raise interest rates once more. This is also a burden for the DAX.
Investors find it difficult to find reasons to buy shares on Corpus Christi. New interest rate fears are weighing on share prices worldwide. The DAX started the holiday trading with losses. At the XETRA opening, the German standard values fell by 0.1 percent to 15,951 points. In the first few minutes of trading, the trend continues downwards.
The leading German index thus bounced back further from the hurdle of 16,000 points, at which it had recently got stuck. The focus of technically oriented investors is now on the upward price gap from last Friday (lower edge at 15,863 points). If the DAX were to close this gap, the downward momentum on the German stock market would intensify further. The next important stop zone for the leading German index would then be at 15,700/15,600 points.
More and more investors fear that the US Federal Reserve might cancel the hoped-for interest rate pause at its meeting next week and instead raise interest rates once more. These fears are fueled by the recent central bank decision in Canada.
Because of the increasing price pressure, Canada’s central bank raised its key interest rate to 4.75 percent yesterday – the highest level in 22 years. For similar reasons, Australia’s central bank tightened its monetary policy on Tuesday.
“The Bank of Canada’s decision has highlighted the dilemma facing policymakers,” writes Commerzbank analyst Charlie Lay. There is a risk of a premature pause given robust growth and persistent inflation. Hence the need to continue raising interest rates and to act even more vigorously.
Investors’ renewed fear of interest rates can be read from the CME Group’s Fed Watch Tool. Accordingly, 62.1 percent of investors currently expect the US Federal Reserve to pause interest rates, while 37.9 percent are expecting a rate hike of 25 basis points. For comparison: Just a day earlier, only 21.8 percent had expected another rate hike.
Since there are public holidays in some federal states and European countries, only a few economic data are on the agenda today. Stock marketers focus their attention on the weekly US unemployment figures and the final figures for the gross domestic product of the euro zone.
The data from the individual member countries suggested that the economy had shrunk by 0.1 percent at the start of the year, said economist Jörg Angele from asset manager Bantleon. “In view of two consecutive quarters of declining economic output, the euro zone, like Germany, meets the common definition of a recession that many market participants have.”
Negative targets for DAX trading come from the US stock exchanges, interest rate fears weighed primarily on technology stocks. The technology-heavy Nasdaq lost 1.3 percent yesterday to 13,104 points. The broad S&P 500 fell 0.4 percent to 4268 points. The Dow Jones index of standard values, on the other hand, closed 0.3 percent higher at 33,665 points.
The interest rates of the central banks also unsettled investors on the Asian stock exchanges. In Tokyo, the leading Japanese index Nikkei 225 closed at 31,641 points, down 0.9 percent. The Hang Seng index of China’s Hong Kong SAR fell 0.1 percent in late trade, while the CSI-300 index, which includes the top 300 stocks on the Shenzhen and Shanghai stock exchanges, rose 0.7 percent.
The euro held its ground above the $1.07 mark this morning. Most recently, the common currency cost $1.0716, slightly more than the previous evening. The price of gold is also treading water. A troy ounce of the yellow precious metal currently costs 1946 dollars.
Oil prices post slight losses in early trading. In the morning, a barrel (159 liters) of North Sea Brent costs $76.81, 14 cents less than the day before. The price of a barrel of the American grade West Texas Intermediate (WTI) fell by 12 cents to $72.41. Worries regarding a global economic slowdown have been keeping oil prices in check for weeks.
In the DAX, the focus is on the Airbus share in the morning. Despite the recent shortage of parts, the world’s largest aircraft manufacturer delivered more commercial jets in May than in any other month since the beginning of the year. A total of 63 machines found their way to their customers. In the first five months, Airbus delivered 244 commercial jets – but that is only a good third of the annual target of 720 machines.
A buy recommendation from Citigroup drives Evotec shares to another high for the year on Corpus Christi. Above all, the classification as a possible “Tesla the biologics manufacturer” sounds appealing to some investors. Citi analyst Peter Verdult has also massively increased his target price from EUR 21.00 to EUR 31.60. In the best case, he even thinks 48 euros is possible.
The Novartis subsidiary Sandoz, which is regarding to be spun off, sees additional sales potential of three billion US dollars over a five-year period through new products. In addition, the company promises profit growth and increasing dividends. The generics subsidiary of Novartis is to be listed separately on the Swiss stock exchange in the second half of 2023.
The group of investors around the French billionaire Xavier Niel and the asset manager Bruellan want to dismiss the board of directors of the ailing Swiss fund house GAM Holding and are calling for an extraordinary general meeting. The group, which claims to control around 9.2 percent of the capital, wants to restructure the company with a newly appointed body.
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