market report
Status: 08.04.2022 09:43 a.m
Sobering has recently set in on the German stock market. Nevertheless, 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 really came into their own: the German stock exchange barometer made a mighty jump and opened 1.4 percent higher at 14,276 points. It is the transparent attempt to lead the DAX back into safer and calmer waters after the recent turbulence. But can that work? Experts remain skeptical.
DAX is technically ailing
“For a long time, the current negative factors were pushed aside. But they have now brought investors back to earth. The recovery came to an abrupt end,” says IG analyst Christian Henke, describing the latest events on the German stock market.
Since their recovery high of 14,925 points at the end of March, the German standard values have lost around 900 points at their peak. The DAX is technically ailing. Should today’s recovery attempt also fail, investors must be prepared for a test of the psychologically significant 14,000 point mark. Just above that is the provisional weekly low from Wednesday at 14,027 points.
Investors caught between fears of war and concerns about interest rates
From a fundamental perspective, it is not only the uncertainties regarding the economic consequences of the Ukraine war and possible new western sanctions that are weighing on share prices.
In addition, there are massive interest rate fears on the part of investors, which seem to be well founded, as a look at the Fed Minutes published mid-week shows: According to this, the USA is heading for one Wave of large rate hikes at upcoming Federal Reserve meetings to. In addition, the Fed wants to shrink its total assets as early as May.
This would “deprive the stock markets of liquidity, which was responsible for the bull market in recent years,” emphasizes IG expert Henke. At the same time, investment alternatives such as government bonds would become more attractive.
Only slight gains in the Dow
The prospect of rising interest rates weighed on the US stock exchanges again yesterday. In New York, the stock market “bulls” managed only a slight countermovement. The Dow Jones index of standard values 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 drives HP stock
HP shares, on the other hand, stood out positively with a plus of 14.7 percent. Warren Buffett’s holding company, Berkshire Hathaway, announced it was selling for $4.2 billion to have bought almost 121 million shares of the personal computing and printing company.
Geopolitical and interest rate risks limit Nikkei gains
The prospect of aggressive global rate hikes also gave Asian investors pause. The Nikkei Index and the broader Topix Index were up 0.4 percent and 0.2 percent, respectively. “The past two decades have seen low inflation and a relatively peaceful world. Going forward, 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 $100
Oil prices recovered somewhat from the previous day’s losses in early trading. In the morning, a barrel (159 liters) of North Sea Brent cost US$ 100.90. That was 32 cents more than yesterday. The price of a barrel of US West Texas Intermediate (WTI) grade rose by a similar amount to $96.37.
The International Energy Agency (IEA) released a further 120 million barrels of crude oil reserves last night in a bid to ease the impact of Russia’s war on Ukraine on the markets. In a first step, the IEA released 62.7 million barrels of crude oil at the beginning of March.
The euro is lagging behind the dollar
The prospect of rapidly rising interest rates in the US gives the dollar another tailwind at the end of the week. The dollar index has scratched 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.
Post boss Appel is the new chairman of the supervisory board at Telekom
The incumbent CEO of Deutsche Post, Frank Appel, is at the Deutsche Telekom shareholders’ meeting yesterday been elected as the new chairman of the board. Previously, institutional shareholders’ protectors had sharply criticized the election of the 60-year-old Post boss because of the accumulation of offices and announced that they would vote against him.
Formula 1 drivers welcome plans from Audi and Porsche
Record world champion Lewis Hamilton and the current champion Max Verstappen have welcomed the Formula 1 plans of Audi and Porsche. “It’s great that we’re getting new manufacturers in our sport. It’s great that we’re evolving. We welcome them,” said Mercedes star Hamilton. The executive board and supervisory board of Volkswagen AG, Porsche AG and Audi AG yesterday confirmed “plans of the two group brands for a possible entry into Formula 1”.
Zalando ex-co-boss Ritter received 89 million euros
The probably best-paid boss of a DAX company in 2021 will be private from June. In his last year at the helm of fashion mail-order company Zalando, Rubin Ritter received remuneration of 89 million euros, according to the annual report. The lion’s share of this relates to stock options that Ritter received in 2011, 2013 and 2014 – for the most part before Zalando went public.
Scout24 jump in after takeover speculation
Takeover speculation puts the focus on Scout24 shares. The papers of the online real estate marketplace jumped by 17.5 percent. The news agency Bloomberg reported, referring to the market observers from “Dealreporter”, that the investors Hellman & Friedman, EQT and Permira have their eyes on Scout24 and are considering a bid. Cinven and CVC are also interested.
Another million payment to Evotec
The Evotec share is one of the most sought-after stocks in the MDAX. The biotech company announced in the morning that a further research program had been selected in the existing neurology cooperation 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
A few weeks after the start of the plant in Grünheide, the electric car manufacturer Tesla is expanding its capacity with a second US factory in Texas. The facility in Austin will initially build the compact SUV Model Y, which also rolls off the assembly line in Brandenburg. Production of the Cybertruck pick-up is also scheduled to start in Texas next year. In addition to finished vehicles, the plant also produces batteries.
Depreciation in Russia weighs on OMV
The Viennese oil, gas and chemical group OMV is struggling with billions in write-downs because of its Russian business. In connection with the halted Nord Stream 2 Baltic Sea pipeline, OMV wrote off one billion euros. In addition, the two Russian companies through which OMV holds almost 25 percent of the Yuzhno Russkoye gas field would no longer be consolidated. Together with write-downs on the reserves of the gas field, this will burden the operating result in the first quarter by an additional one billion euros.