Dusseldorf The German stock market continues to move sideways: On Wednesday noon, the Dax was 0.1 percent up at 15,532 points. After the “mini rally” of the previous week with a plus of 2.8 percent, this trading week is thus constructive. Yesterday, Tuesday, there was even an increase of 0.3 percent with a final score of 15,516 points.
Above 15,400 points, there has been sufficient demand since Monday to support the Dax. The lowest point so far this week is 15,416. So far, however, investors have not allowed the leading index to jump over the presumably decisive mark of 15,600 points. On the upside, it ended at 15,567.
The fund manager survey by Bank of America, in which a particularly large number of 380 international asset managers took part, was again informative. Probably the most important point: Bonds are more unpopular than ever because of high fears of inflation.
Which indirectly speaks in favor of higher share prices. Because, unlike private investors, professionals cannot simply say goodbye to the market; the money has to be invested.
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US equities are seen much more positively again with a net 16 percent overweight, an increase of six percentage points. Net, in the terminology of the survey, means that there are 16 percent more investors who overweight US stocks than those who don’t.
European stocks are still more popular with a net 34 percent of the mentions, but this proportion is declining. Given the price decline since the beginning of September for the Dax, that shouldn’t come as a surprise.
Look at the individual values
Nestlé: Thanks to the strong demand for coffee products and pet food, the Swiss group is increasing its sales forecast for the full year for the second time in three months.
The sustained momentum in the retail sector, the recovery in the restaurant business and market share gains provided a boost. In addition, there were price increases of 1.6 percent, with which the group wants to compensate for the higher spending on purchasing. The company warned last month that purchase prices could rise even more in 2022 than in the current year.
Nestlé is not alone in this development. French competitor Danone expects inflationary pressures to rise in the coming year, while Procter & Gamble plans to raise prices in the US to counter higher raw material and freight costs. “Most companies with strong brands will be able to pass the prices on, and I don’t think the market has understood that yet,” said Kepler-Cheuvreux analyst Jon Cox. Nestle shares are up 3.5 percent.
SGL Carbon: The shares, which were already very weak the day before, came under heavy pressure on Wednesday with a minus of more than 14 percent to 7.42 euros. At the bottom of the SDAX, the title of carbon specialist fell significantly. But there is no current news.
In order to classify the price losses, however, a trader also pointed to the very good development so far this year. The paper cost 2.52 euros in April. In addition to the weakness, the currently significantly lower aluminum price could also be added, according to the expert. SGL supplies for the aluminum industry.
KWS Saat: The seed manufacturer from Einbeck wants to distribute more money to the shareholders after a profit increase. In view of the increase in earnings, the management board proposes a dividend of EUR 0.80 per share. KWS paid EUR 0.70 in the previous year. Nevertheless, the share is down around one percent.
Sartorius: The paper is one of the weakest DAX values with a minus of 1.4 percent. Although the laboratory service provider and pharmaceutical supplier reported that business was still going well, the incoming orders, according to a dealer, indicate that the growth dynamic in the third quarter was not higher than in the first half of the year. This could be a burden, he said.
German Stock Exchange: The shares lost 0.5 percent after quarterly figures that were slightly better than expected and retained targets for the full year and for the medium term. In the case of the market operator, reference was made to a somewhat weaker cyclical earnings component than in the previous year, as the market fluctuations have so far been less severe than in 2020.
Bond market yields continue to rise
The prices of German manufacturers are climbing from record to record, mainly because of expensive energy. The producer prices of commercial products rose in September by 14.2 percent compared to the same month last year and thus more strongly than in almost 47 years. The producer prices are considered to be a leading indicator for the development of inflation.
Interest rates are rising accordingly in this country. The market is apparently pricing in earlier rate hikes by the central banks. The yield on ten-year Bunds climbed to minus 0.098 percent. On Thursday this value was minus 0.190 percent.
The same picture across the Atlantic. For a ten-year US government bond, this value is now 1.655 percent, the highest value since May of this year.
Bitcoin continues to rise towards a record high
Investors’ speculative enthusiasm for cryptocurrencies has increased with the listing of the first exchange-traded Bitcoin ETF in the US. The volatile digital asset is currently trading at $ 64,000, close to its April high.
But it remains to be seen whether the ETF listing will fuel the next spike in Bitcoin prices or whether it will prove to be an opportunity for profit-taking, according to Craig Erlam, senior market analyst at FX broker Oanda. “Either of these could trigger some pretty wild cryptocurrency price action,” he wrote in a note.
Analyst Timo Emden from Emden Research sees the course as positive: “The fact that profit-taking on a large scale has so far not taken place suggests that investors are hungry for more”. But the last bit of momentum is still missing for a new record.
What the Dax chart technology says
According to the technical analysis, the Dax picture is gradually improving: The Dax has held the strategically important zone slightly above the 14,800 mark. Even the long-term important 200-day line, which is currently at 15,101 meters, has not yet been undercut on a sustainable basis.
With the new highs in October, an important trend-following indicator generated a buy signal. The name for this is MACD (Moving Average Convergence / Divergence) and consists of two moving averages.
For the technical analysts at HSBC Germany, this indicator gives “a buy signal for the first time since the end of July” – the best since November 2020. To explain: In both cases, the Dax then rose significantly. In November 2020, the stock market barometer was 11,450 points, then the starting signal for the vaccine rally was given. And in July the Dax slipped down to 15,000 points, after which the record high of 16,030 points was reached.
Jörg Scherer, Head of Technical Analysis, said on Thursday last week before the start of trading: “For bullish investors, there is definitely an opportunity to buy, especially since the risk can be narrowly limited with a tight stop below 14,800 points.”
However, the resistance on the way up is varied, especially in the range between 15,550 and 15,600 points. The breakout beyond that should be seen as the next buy signal towards a record high, says Scherer.
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