Dusseldorf As in the previous month, US inflation data boosted the German stock market. According to the data, the Dax rose by more than 200 points on Tuesday afternoon. At the close of trading, the Dax was still up 1.3 percent at 14,497 points.
US inflation came in at 7.1 percent in November, below the expected 7.3 percent. It was another decline in the annual rate, the fifth in a row. For the capital market expert Thomas Altmann from the investment house QC Partners, “the likelihood that inflation has peaked in the USA has increased significantly”.
The November inflation is the last value that the US Federal Reserve can take into account in its interest rate decision tomorrow, Wednesday. Everything points to a rate hike of “only” 50 basis points.
It will now be exciting to see how high hopes Fed President Jerome Powell is having tomorrow for the rate hike cycle to end soon. “Many will now expect that Powell will not only announce a further slowdown in the rate of increases, but even an end to the increases by mid-2023 at the latest,” says Altmann.
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The Dax thus resolves its four-week sideways phase upwards. During this period, the index moved within the range of 14,584 points on the upside and 14,150 points on the downside. If the Dax establishes itself above the previous high, the rally should continue. The new price targets are now 14,709 points, the high from the trading month of June, and then listings in the range between 14,800 and 15,000 points.
The interest rate worries, which have subsided after the US inflation figures, are attracting investors in particular to technology and growth stocks. Infineon shares jumped 4.6 percent. In the US, prices from Apple, Alphabet, Microsoft and Meta are also rising.
This rally on the German stock market is unusual: so far there have only been mini setbacks of 300 to 400 points, a maximum drop of around three percent. However, declines of six to seven percent are usual during such a rally.
The US inflation data is just the prelude to more landmark dates through the end of next week. With the US interest rate decision on Wednesday, the ECB meeting and the big expiration day on Friday, known as the witches’ sabbath, further turbulence is likely to occur on the German stock market.
Against a continuation of the 2700-point rally since the end of September, the high investment rate among investors, which according to the data from the analysis company AnimusX has increased significantly in the sideways phase lasting several weeks, spoke against the US data. The cash ratio of investors has become correspondingly low, which means there was no money for further acquisitions.
But apparently many foreign investors have also bought. This can also be deduced from the rising euro against the dollar. The European common currency also jumped significantly after the US inflation data and was last at 1.0627 dollars.
Crude oil prices are rising again
The Keystone pipeline in the US, which has been closed for almost a week, is fueling fears of a tightening supply on the crude oil market. Brent crude oil and US oil WTI rose more than three percent to $80.84 and $75.69 a barrel. The Keystone Pipeline, which transports around 620,000 barrels of Canadian crude oil to the US every day, has been closed since a leak was reported on December 7th.
Investor sentiment on the oil market is also signaling a tense situation that could lead to a price slide or a significant increase.
Look at the individual values
Wacker chemistry: The papers benefited from an upgrade by UBS and climbed 5.3 percent. The expert Andrew Stott based his buy recommendation for the specialty chemicals group in a sector study on the recent below-average price development of the share, among other things. In addition, Wacker could benefit from the political efforts in terms of energy transition.
SAP: Software stocks are worth watching for a good template from the US. There, the cloud business had helped SAP competitor Oracle to jump in sales. The Walldorfer shares only benefited from this with a comparatively small increase of 1.5 percent.
Fraport: An analyst comment also put Fraport in the limelight, with shares rising by 1.3 percent. The Frankfurt airport operator is in the best position to be able to cushion a high increase in costs. The traffic recovery in Frankfurt will not be as dynamic as elsewhere in Europe, but international activities should help here, according to the thesis.
Here you can go to the page with the Dax course, here you can find the current tops & flops in the Dax.