Dusseldorf After the sell-off on Thursday, the focus on the German stock market was 16,000 points. The German benchmark index ended the trading day at 0.7 Percent in the red at 15,948 points. The daily low at 15,897 points shows that the short-term slide on Thursday was not a slip. The Dax fell to 15,988 points on Thursday in the course of the opening on Wall Street, but ended the trading day at 16,052 points – a minus of 1.4 percent.
The Dax has therefore fallen by around two percent from the record high: so far, a rather small consolidation, only the dynamism surprised. With a high trading volume of 75 million papers and a maximum minus of almost 300 points, there was a real sell-off yesterday.
The weak US job data caused the Dax to slide back into the red more clearly on Friday. Only 199,000 jobs were created. The forecasts of the US economists, however, were according to a survey by the business news service Bloomberg at 433,000 new jobs.
At the same time, the unemployment rate fell to 4.2 percent and the average hourly wage rose by 4.7 percent compared to the previous year. Experts had expected a higher rate and a weaker rise in wages. With these numbers, the risk of a wage-price spiral increases.
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According to the analysts at Landesbank Helaba, the US labor market is continuing its recovery based on the data, even though the consensus estimate for job creation was again disappointed. “Against the background of the lower unemployment rate and the strong wage increases, however, the Fed should see the decided, faster pace in reducing bond purchases confirmed,” say the experts.
Due to the disappointing US labor market data, investors parted with US government bonds on Friday and drove the yield on ten-year stocks to a nine-and-a-half-month high of plus 1.762 percent. Their German counterparts could not escape this, with a return of minus 0.043 percent, just below their two-and-a-half-year high on Thursday.
However, there are currently many reasons against further high price losses. One of the most important is seasonality: at the beginning of January each year, professionals have to invest fresh investor money. In addition, given the European zero interest rate policy, there is currently still no alternative.
Even in the disastrous stock market year 2018, when the Dax slipped by more than 18 percent, the index rose by more than five percent in the first three weeks. This seasonal behavior also includes significant price setbacks at the end of January, when all new funds have been invested. In 2018 there was a significant correction from the end of January to March, with a minus of 15 percent. Last year, too, the Dax fell at the end of January – but only by six percent.
The seasonality factor is supported by the Frankfurt Stock Exchange survey of medium-term oriented private and institutional investors. According to the survey, investment professionals are waiting for the chance to return to work cheaply. Presumably some of them bought on Thursday, another part should invest at the latest at prices of 15,800 / 15,850 positions.
This area is considered to be solid support for the leading German index, which will probably hold – if there is no extremely bad news.
Bitcoin price continues to slide
Cryptocurrencies continued to decline at the end of the week: The largest and oldest cyber currency lost up to five percent to $ 40,959, marking its lowest level in more than three months.
Ether also fell at its peak by almost nine percent to a three-month low of $ 3,119. Since the beginning of the year, Bitcoin and Ether have already been down around ten and 14 percent, respectively. “Bitcoin slept its way into 2022,” comments Craig Erlam from brokerage house Oanda.
An interesting aspect of Bitcoin is the connection with Kazakhstan, where the internet has been switched off. The country is one of the most important locations for mining bitcoins. This is the name given to those complex calculations with which new units of the cryptocurrency are generated with high energy consumption.
This process, also known as crypto mining, has declined sharply in Kazakhstan. A specialist from the American analysis and news platform “The Block” dared to quantify roughly on Twitter on Wednesday: the so-called hashrate would have fallen by around twelve percent worldwide. That means: The computing power of all Bitcoin miners around the globe had collapsed by more than a tenth due to the failures in Kazakhstan.
Extreme industry rotation
Despite a Dax decline of just two percent since the beginning of the year, a lot has changed in terms of the individual values during this period. The performance of the respective stocks also shows how far the industry rotation has progressed towards cyclical values and away from the so-called corona winner papers.
A plus of around ten percent for the Daimler, Deutsche Bank and Porsche stocks are offset by similarly high losses at the pharmaceutical and laboratory supplier Sartorius and the cooker box mail order company Hellofresh. The stock of the grocery delivery service Delivery Hero even fell by more than 13 percent.
Look at the individual values
Lanxess: After an upgrade, the stock rose 2.6 percent. The Barclays Bank has raised the securities to “overweight” from “equal weight” and raised the price target to 70 (60) euros.
Deutsche Bank: The papers of the money house rose by 1.7 percent. According to a “Handelsblatt report”, the financial institution sees itself on course for its central return target for this year.
Infineon: The semiconductor company is benefiting from the good mood in the industry after the profit jump at Samsung. The shares of the South Korean electronics company gained around two percent, while the shares of Infineon rose 1.5 percent.
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