Dusseldorf Against the background of high inflation data in the euro zone, investors on the German stock market acted defensively on Monday: in the early afternoon, the leading German index was up 0.2 percent at 13,275 points.
According to Eurostat, there is double-digit inflation in the euro area for the first time since the introduction of the common currency. Consumer prices rose by 10.7 percent, according to an initial estimate by the statistics agency. Experts had expected inflation to rise to 10.2 percent, compared to 10.0 percent in September.
On the other hand, the economy in the euro zone developed better than expected. In the third quarter, the gross domestic product of the 19 euro countries grew by 0.2 percent compared to the previous quarter, as also reported by Eurostat. Analysts had expected growth of 0.1 percent. In view of these contradictory signals, investors are reluctant to buy on Monday.
The Dax closed the past five trading days with a plus. Overall, the rally has increased by 1400 points since the end of September. On Friday, the Frankfurt benchmark closed at 13,243 points, an increase of 0.2 percent. The decision by the European Central Bank (ECB) on Thursday to raise interest rates again by 0.75 percentage points did not dampen investor optimism.
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The next hurdle on the way up is the 200-day line, which is currently at 13,689 points, says Thomas Altmann from the investment house QC Partners. Since the beginning of the Russian war of aggression in Ukraine, the Dax has been below this line, which continues to fall. “Recapturing the 200-day line would be the really big liberation,” says Altmann.
Then the current bear market rally could turn into an actual trend reversal. A bear market rally is a short period of rising prices within a long period of falling prices.
However, stock market experts are only hoping for information about this in the middle of the week. Because of the domestic German holidays (Reformation Day and All Saints’ Day), the trading volume on Monday and Tuesday could be lower. Up and down swings – so-called false breaks – are therefore more likely, warns Martin Utschneider, technical analyst at private bank Donner & Reuschel.
>> Also read Markets Insight: Is the bear market ending?
Towards the middle of the week, the focus of investors will again be on the policies of the international central banks. Because on Wednesday the US Federal Reserve will decide on its next rate hike.
The markets are currently assuming a step of 0.75 percentage points – just like in September. On the futures exchanges, professional investors are already betting on interest rate cuts in the middle of next year.
In the euro zone, too, the days of significant interest rate hikes could be over. The head of the Dutch central bank, Klaas Knot, is planning another interest rate hike of at least 0.5 percentage points in December. But between the lines on Thursday it was already clear that the ECB would then proceed more cautiously.
Alexander Krüger, chief economist at the private bank Hauck Aufhäuser Lampe, thinks this is wrong: “Contrary to what was recently signaled, the ECB should take the fight against inflation more seriously again,” he commented on the high rise in consumer prices in the euro area. Jörg Krämer, chief economist at Commerzbank, also believes another rate hike of 0.75 percentage points is necessary in December.
Chief economist Philip Lane could provide further clues regarding the future monetary policy of the European Central Bank. On Monday afternoon he will give a speech at a conference of the Danish central bank.
Dax investors cautious before US interest rate decision
Look at individual values
Shop pharmacy: The online pharmaceutical retailer presented its full quarterly report on Monday. Sales increased by 20 percent to 285 million euros. The stock gained a good four percent in the early afternoon.
Fresenius Medical Care: The new boss of the medical technician takes action in the face of unexpectedly severely crumbling profits. It was “urgently necessary to improve our operational business development through far-reaching measures,” said Carla Kriwet. FMC lowered its profit forecast for the second time in three months, forcing the parent company Fresenius to make a correction. The FMC share gains 5.6 percent, the Fresenius share price increases by a good five percent.
Delivery Hero: US investment bank Goldman Sachs lowered its target price for the food delivery service from €76 to €68 ahead of the quarterly figures, but left the rating at “buy”. The food delivery service should have posted a solid third quarter, an analyst wrote in a Monday issue With an increase of 5.5 percent, the papers are at the top of the MDax.
You asset: Analysts at Baader Bank have downgraded the real estate company twice, from “Buy” to “Reduce”. They reduced the target price by more than half. The shares of the company listed in the SDax small-cap index lose more than five percent.
Here you can go to the page with the Dax course, here you can find the current tops & flops in the Dax.