Dax closes after high for the year – euro benefits from the weakness of the dollar

Dusseldorf The Dax is on the up again on Thursday: At the end of trading, it was up 0.7 percent at 15,523 points, after previously marking a new high for the year at 15,659 points. Some positive figures give the Dax an impetus: Siemens and Deutsche Börse opened their books on Wednesday evening after the stock market closed.

Siemens is now increasing its forecast for the new fiscal year: The Dax group expects sales growth of seven to ten percent for the 2022/2023 fiscal year. The analysts at Raiffeisen Research summarized that the Munich-based company reported a strong increase in sales with a high level of incoming orders. The share rose by 6.9 percent and is the biggest winner in the Dax.

Deutsche Börse was also able to report positive figures on Wednesday evening. The profit attributable to the shareholders rose by 24 percent to 1.49 billion euros last year, the stock exchange operator said. Net sales also increased by 24 percent to 4.33 billion euros. “We have fully exploited the strengths of our diversified business model,” explained stock exchange boss Theodor Weimer.

Deutsche Börse intends to pay its shareholders a higher dividend of EUR 3.60 per share for the past year. The paper rises by around two percent.

Investors can also look forward to price gains at Fresenius: According to a report by Wirtschaftswoche, Fresenius boss Michael Sen is preparing to unbundle Fresenius and the dialysis subsidiary FMC. The aim is for the mother to relinquish control of FMC and no longer have to fully consolidate FMC. Fresenius shares were up 3.4 percent at the close, while FMC came under pressure and are down 2.9 percent.

Inflation data below expectations

German consumer prices, which were not as strong as economists had expected, also brought relief to the markets on Thursday. The inflation rate in Germany rose by 8.7 percent in January compared to the same month last year, as the Federal Statistical Office announced in the morning based on a preliminary estimate. This means that inflation has increased slightly compared to December, when the inflation rate was 8.6 percent.

“Despite the rebound from the energy price brake, the inflation rate has hardly increased. That’s a good sign, as it shows that inflation has peaked,” says Alexander Krüger, chief economist at Hauck Aufhäuser Lampe. In his opinion, the energy prices speak for further and significant declines in the inflation rate.

Thomas Gitzel, chief economist at VP Bank, assumes that inflation rates will continue to fall in the coming months. “Energy price base effects will have a particularly strong impact from March onwards and will push down inflation rates,” he says.

The German inflation figures this month have an additional explosiveness: because they could not be published on Tuesday of last week due to a technical problem, the data were not included in the inflation figures for the euro area published on Wednesday. Including the German data, this rate could now be higher than before.

Also of importance for investors: the publication of the US labor market data. They are considered an important criterion for monetary policy: the more stable the labor market, the more likely it is that interest rates will rise.

The number of weekly initial jobless claims in the United States has recently increased more than expected, as the Department of Labor in Washington announced in the afternoon German time. The initial applications in the past week increased by 13,000 to 196,000, economists had expected around 190,000 applications.

“Should the number rise unexpectedly and significantly, market participants could quickly speculate that the end of the interest rate hike cycle is near,” wrote the analysts at Helaba in the run-up to the publication.

On Wall Street, as in Germany, strong company balance sheets ensured a good mood: the indices all started trading with a plus.

Look at the euro and oil

The euro also benefited from a weak dollar in the morning and rose slightly. The euro was fixed at $1.0751 earlier in the evening. The European Central Bank set the reference rate at 1.0771 (Wednesday: 1.0735) dollars. The dollar thus cost 0.9284 (0.9315) euros.

In addition to the weakness of the dollar, the euro exchange rate is supported by monetary policy: the ECB representatives had recently spoken out in favor of further interest rate hikes in the fight against inflation. Commerzbank analyst Esther Reichelt sees a hard lower limit at $1.07. “However, as long as the inflation rate continues to trend downwards, the arguments for a weaker dollar again in the medium term remain,” she writes.

Oil prices did not continue their strong rise since the beginning of the trading week. A barrel (159 liters) of North Sea Brent for delivery in April last cost 84.06 US dollars. The price for a barrel of the American West Texas Intermediate (WTI) variety for delivery in March was $77.69.

US oil reserves rose further last week by 2.4 million barrels to 455.1 million barrels, it was announced on Wednesday. Analysts assume that this has slowed the rise in oil prices. Rising US oil reserves usually weigh on oil prices.

Look at the chart technique

On the downside, the area just above 15,220 points offers short-term support. In the medium term, investors should keep an eye on the range between 15,000 and 14,800 points: this area has always been highly competitive in recent years and, for example, offered nine months of support in 2021.

Look at the individual values

Bayer: On Wednesday, shortly before the close of trading, Bayer announced that Werner Baumann was stepping down as CEO. Baumann had recently come under increasing criticism. The papers lose 3.4 percent after gains the previous day.

Delivery Hero: The food delivery service performed worse than expected in the final quarter of 2022. Sales adjusted for voucher costs (segment sales) rose by around one fifth to EUR 2.5 billion in the fourth quarter compared to the same period of the previous year. The group thus missed the expectations of industry experts. But CEO Niklas Östberg wants to make Delivery Hero operationally profitable in the current year. The manager continues to target a full-year operating margin of 0.5 percent, with profitability likely to more than double in the second half. Delivery Hero shares tumbled 9.2 percent.

K+S: After initial gains, K+S shares in the MDax lost 0.6 percent. Analysts at Citigroup have upgraded the fertilizer and salt maker’s shares to neutral from sell. They raised the price target from 21 to 22 euros. The papers went out of business on Wednesday at EUR 21.59.

KWS seed: After good business in the first half of the year, the seed manufacturer KWS has increased its sales forecast. In the first six months of the 2022/23 financial year, sales increased by 31 percent to 563.7 million euros, as the company announced on Thursday. According to schedule, the operating result (Ebitda) is negative, with a minus of 24.5 million euros after minus 45.2 million euros in the previous year. KWS now expects revenue growth of 13 to 15 percent for the current 2022/23 fiscal year. The papers are almost at the level of the previous day.

Talanx: The insurance group slightly exceeded its own profit target in 2022 despite high catastrophe losses. At a good 1.17 billion euros, the surplus was slightly above the target range of 1.05 to 1.15 billion. For 2022, shareholders will receive a 25 percent higher dividend of two euros per share. The papers lose note hardly changed.

verb: According to the analysts at Hauck Aufhäuser, the decline in operating profits for the biofuel supplier was milder in the second quarter than feared. The margins should recover again, and the confirmed forecast for the year also suggests a better second half of the year. The papers increased by 1.4 percent.

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