Dusseldorf Against the background of high inflation data in the euro zone, investors on the German stock market acted defensively on Monday: the Dax closed at 13,254 points at the start of the week, little changed.
It’s not a strong continuation of last week’s five-day bear market rally. Overall, the Dax has gained 1400 points since the end of September. Nevertheless, the Frankfurt benchmark has established itself above the 13,000 mark and draws a good balance for October, which is typically considered a golden month on the stock exchange.
On the other hand, the economy in the euro zone developed better than expected. In the third quarter, the gross domestic product of the 19 euro countries grew by 0.2 percent compared to the previous quarter, as also reported by Eurostat. Analysts had expected growth of 0.1 percent. Given these conflicting signals, investors held back on buying on Monday.
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The next hurdle on the way up is the 200-day line, which is currently at 13,689 points, says Thomas Altmann from the investment house QC Partners. Since the beginning of the Russian war of aggression in Ukraine, the Dax has been below this line, which continues to fall. “Recapturing the 200-day line would be the really big liberation,” says Altmann.
Then the current bear market rally could turn into an actual trend reversal. A bear market rally is a short period of rising prices within a long period of falling prices.
>> Also read Markets Insight: Is the bear market ending?
The entry of private investors could also give the Dax a further boost. The current sentiment survey by the Handelsblatt shows that a neutral mood currently predominates, which is an improvement on the pessimistic mood of the past few weeks.
Due to the sustained price gains, more and more private investors are hoping that the stock market will improve in the long term. According to the survey, investors’ willingness to invest has increased, which is why the sentiment expert Stephan Heibel suspects that investors would buy “if only the prices would come back briefly”. That would in turn drive prices up.
Due to the domestic German holidays (Reformation Day and All Saints’ Day), the trading volume on Monday was initially lower. Only in the afternoon did the number of shares traded increase. Up and down swings – so-called false breaks – are more likely with low trading volumes, warns Martin Utschneider, technical analyst at private bank Donner & Reuschel.
Towards the middle of the week, the focus of investors will again be on the policies of the international central banks. Because on Wednesday the US Federal Reserve will decide on its next rate hike.
The markets are currently assuming a step of 0.75 percentage points – just like in September. On the futures exchanges, professional investors are already betting on interest rate cuts in the middle of next year.
In the euro zone, too, the days of significant interest rate hikes could be over. The head of the Dutch central bank, Klaas Knot, is planning another interest rate hike of at least 0.5 percentage points in December. But between the lines on Thursday it was already clear that the ECB would then proceed more cautiously.
Alexander Krüger, chief economist at the private bank Hauck Aufhäuser Lampe, thinks this is wrong: “Contrary to what was recently signaled, the ECB should take the fight against inflation more seriously again,” he commented on the high rise in consumer prices in the euro area. Jörg Krämer, chief economist at Commerzbank, also believes another rate hike of 0.75 percentage points is necessary in December.
Dax investors cautious before US interest rate decision
Look at individual values
Shop pharmacy: The online pharmaceutical retailer presented its full quarterly report on Monday. Sales increased by 20 percent to 285 million euros. The stock gained 1.3 percent in the late afternoon.
Fresenius Medical Care: The new boss of the medical technician takes action in the face of unexpectedly severely crumbling profits. It was “urgently necessary to improve our operational business development through far-reaching measures,” said Carla Kriwet. FMC lowered its profit forecast for the second time in three months, forcing the parent company Fresenius to make a correction. FMC (6.5 percent) and Fresenius (5.2 percent) were the two strongest Dax values.
Delivery Hero: US investment bank Goldman Sachs lowered its target price for the food delivery service from €76 to €68 ahead of the quarterly figures, but left the rating at “buy”. The food delivery service should have posted a solid third quarter, an analyst wrote in a Monday issue presented Outlook.The papers gained almost two percent.
You asset: Analysts at Baader Bank have downgraded the real estate company twice, from “Buy” to “Reduce”. They reduced the target price by more than half. The shares of the company listed in the SDax small-cap index lost almost six percent.
Here you can go to the page with the Dax course, here you can find the current tops & flops in the Dax.