Dusseldorf After several hours of back and forth, a friendly trend prevailed on the German stock market. The Dax closes 0.9 percent up at 13,281 points.
The stock market barometer remains in its six-day breather after the 1000-point rally from early to mid-July. Only courses above 13,400 points, the high point of this upward movement, would break up this formation.
Investors who want to continue the upward movement should wait patiently until the Dax overcomes this short-term hurdle. On the downside, with sustained listings below 13,000 points, there is a risk that the rally will end.
Initially, the reactions on the markets after the new figures on US growth were manageable. Because as of today it is clear: the US economy is already in the middle of a recession. The big question now is how deep it gets and how long it lasts.
But to what extent is the US recession slowing down the US Federal Reserve’s roadmap? There’s a good chance the Fed will stop raising rates as much given this new data.
After a decline in economic output at the beginning of the year, gross domestic product (GDP) fell by an annualized 0.9 percent in the second quarter. Analysts, however, had expected slight growth of 0.4 percent.
Since the US economy shrank by an annualized 1.6 percent in the first quarter, the definition of a technical recession is met. This is what economists talk about when economic output falls two quarters in a row.
US growth figures are extrapolated for the year, i.e. annualized. They are therefore not directly comparable with growth data from Europe, where this is not the case. To approximate a growth rate comparable to Europe, you would have to divide the US rate by four.
The first estimate of the inflation rate in Germany, which fell only slightly in July, was no help. Consumer prices increased by 7.5 percent compared to the previous year. Economists had previously expected a value of 7.6 percent, as in June. In May, the inflation rate was 7.9 percent. Another significant drop in inflation would have been a positive signal for the stock exchanges and would have taken some of the pressure off the ECB to raise interest rates further.
>> Read about this: Inflation in Germany at 7.5 percent in July – this hits one group in particular
The reason for the somewhat weaker price pressure is primarily the short-term effects of the tank discount and the 9-euro ticket. Both measures have been in effect since June and are limited to the end of August. Economists expect inflation to rise again significantly thereafter. For the capital market expert Thomas Altmann from the investment house QC Partners, “the hope that the peak of inflation has been passed lives on with today’s figures”.
After the Fed’s expected 75 basis point rate hike last Wednesday, futures pros are growing convinced that rates will only be hiked another 50 basis points at the next September meeting. According to the Chicago Stock Exchange CME’s Fed Watch tool, two-thirds now expect a hike of 50 basis points, compared to only half of the pros yesterday, Wednesday
However, an important question must be answered for the rally on the German stock market to continue: Which buyers can drive the Dax further up? According to the Dax-Sentiment survey by Handelsblatt and the survey by the Frankfurt Stock Exchange, only long-term capital inflows, especially from abroad, can bring about a change in trend.
According to a survey by the Frankfurt Stock Exchange among medium-term investors, a majority of domestic professionals are still sitting on high book losses. Selling these positions at current levels seems too painful.
On the one hand, they are no longer buyers and, on the other hand, they are likely to slow down the upswing with their sales if prices should rise. Incidentally, according to investor psychology, such a situation leads to an interesting side effect.
The longer such book losses last, the more resistant investors become to negative economic and political information, which is at least psychologically minimized through selective perception. This is the opinion of behavioral economist Joachim Goldberg, the leading German sentiment expert, after evaluating the current survey by the Frankfurt Stock Exchange.
The Handelsblatt survey Dax-Sentiment on Monday of this week already showed: The cash ratio fell from extremely high to extremely low within a few days. This means that many investors have already positioned themselves “long” in the rising prices of the past week in order to benefit from the rally. As a result, they have bet on further rising prices and are no longer buyers.
Quiet location at the gas market
The situation on the gas market is calming down. At the start of trading, the price per megawatt hour fell to EUR 194, but then rose again to EUR 202.50. Yesterday, Wednesday, the price peaked at 227 euros. This is the TTF futures contract for Dutch natural gas, which is considered to be a trend-setter for the European natural gas market.
After a 10-day maintenance break, Gazprom pumped gas through the pipeline again last week, albeit in smaller volumes than before. On Wednesday morning, the state-owned company again restricted the gas volume from 40 percent to 20 percent of the pipeline capacity.
Look at the individual values
Fresenius Medical Care: A lack of staff and rising costs are forcing the DAX group Fresenius Medical Care (FMC) to withdraw its annual targets. This also applies to the parent company Fresenius, which is also lowering its forecast. FMC shares fell 14.4 percent, Fresenius 8.2 percent.
Aixtron: Full order books and strong growth in the second quarter make the chip systems manufacturer confident that it will achieve its goals. “Despite the challenging market environment, we were able to grow as planned with supply chains that remained strained,” explained CFO Christian Danninger. The stock gained 1.1 percent.
Wacker chemistry: Business at the Munich-based specialty chemicals group is booming despite high energy costs and price increases. The family business significantly raised its sales and profit forecasts for the current year on Thursday.
CEO Christian Hartel is worried about the further rise in prices. So far, Wacker has managed to pass the cost increases on to customers. After an increase of 2.4 percent the day before, the paper rose by another ten percent.
Airbus: The world’s largest aircraft manufacturer has had to slow down its ambitious growth plans because of problems with its suppliers. The shares were about 3.2 percent downhill.
kion: Supply chain disruptions hit forklift manufacturer Kion in the first half of the year. In view of the imponderables, the Executive Board did not dare to make an exact forecast for the year as a whole. However, he expects that the EBIT will be below the previous year as a result of the material bottlenecks and price increases. The paper lost 4.1 percent.
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