Dusseldorf The German stock market got off to a good start in the new stock market year. By the end of trading, the leading index Dax had increased by around one percent to 14,069 points.
The German leading index ended the past year 2022 at 13,923 points. This score is the benchmark for many asset managers who invest in the German stock market, since the return on their investment vehicles must be able to be measured against the Dax performance.
The losers of 2022 turned positive at the start of the new stock market year. Apparently, investors are hoping that everything that went badly in 2022 “can only get better” this year.
Europe’s Stoxx 600 of property stocks, which fell nearly 40 percent last year as the region’s worst-performing index, rose. The biggest winners were the Dax and MDax taillights Vonovia and TAG Immobilien with a price increase of four and almost six percent respectively.
The automotive supplier Continental, the online fashion retailer Zalando and the battery manufacturer Varta, which had recorded price losses of between 39.9 and 80.3 percent in 2022, jumped up to 6.7 percent. The automotive sector also grew, with luxury stocks such as LVMH and Kering climbing up to two percent.
However, the new stock market year should not really start until tomorrow, Tuesday. The stock exchanges in New York, London, Tokyo, Hong Kong, Zurich and some other trading venues are starting the new year with a public holiday. Sales on Monday are likely to remain below average.
But that doesn’t have to mean that there can’t be any price fluctuations today. On the contrary: now a few orders are enough to make the Dax rise or fall significantly.
With a minus of 12.4 percent, the stock market year 2022 was weak, but not a disaster. Most recently, the Dax ended a stock market year with losses in 2018 with minus 18.3 percent and 2011 with minus 14.7 percent. In the following year, the leading index was able to increase by almost 30 and 25 percent. Is stock market history repeating itself and will the Dax also be up in 2023?
Statistically, there’s a lot to be said for it. With the exception of the catastrophic years 2001 to 2003, there were always gains in the following twelve months after a loss-making year on the stock exchange throughout the history of the Dax.
At first glance, it doesn’t look like that, given an impending recession and the ongoing war in Ukraine. As a result, most experts expect a difficult course for 2023, especially in the first half of the year. Because, according to stock market expert Toni Riedl, “statistically, the prices on the stock exchanges usually fall well into the recession, before they then stabilize depending on the extent of the economic downturn and gradually pick up again as the recession progresses.”
Weak prices into spring 2023 would fit this typical pattern well. Following a sell-off in the traditionally weak months of February and March, prices could slide again in the autumn after a summer rally. “If the general economy picks up again and inflation continues to fall, the year 2023 could still end on a positive note on the stock exchanges, despite heavy fluctuations,” says Riedl.
What the Dax chart technology says
For chart technicians, the next hurdle for the Dax is the 14,150 point mark, which has not yet been fully reached today. If the daily closing price were above this mark, the leading index would be back in its sideways phase lasting several weeks, which characterized trading from mid-November to mid-December 2022.
The upper limit of this range is 14,584 points. In addition, there was only a brief jump to 14,675 points, but this can only be seen as a slip.
On the downside, the low of the price slide in mid-December, which is 13,792 points, is important. The 200-day moving average is currently around 13,570 points and is important for strategic investors. As long as it holds, the ongoing consolidation is still healthy.
Bond yields are falling
The situation on the bond market has eased. Last Friday, the yields on German government bonds continued to climb after the Dax closed. At 2.77 percent, the value for a two-year bond reached its highest value since 2008, while the ten-year government bond yielded 2.58 percent, the highest since 2011.
Yields are falling again this Monday, however. The value for a two-year bond is 2.68 percent in the evening, the value for a ten-year is 2.44 percent.
Look at the individual values
Sartorious: The laboratory supplier also wants to take over other companies in the coming years. The strategy with an average of two acquisitions per year should be continued, said Sartorius CEO Joachim Kreuzburg of the German Press Agency. The general aim is to speed up the development and manufacture of medicines and to reduce the costs involved. But the stock fell 5.5 percent.
Dax starts the new stock exchange year with a profit
Deutsche Bank: Germany’s largest financial institution and the US bank JP Morgan have applied for the dismissal of lawsuits in the United States over their dealings with sex offender Jeffrey Epstein. At the end of November, a group of unnamed women filed a lawsuit against the banks. Deutsche Bank shares rose 3.3 percent.
Airbus: The group apparently wants to take a minority stake in Atos’ cybersecurity division. The aircraft manufacturer has therefore started exploratory talks with the IT company, wrote the French newspaper “Les Echoes” in its Monday edition, citing insiders. The Airbus share can increase by 2.6 percent.
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