Dusseldorf The US jobs data have dealt a serious blow to the German stock market. The Dax slipped by more than 200 points within a few minutes on Friday afternoon, but was then able to recover slightly.
The leading index is currently unchanged at 14,497 points. The stock market barometer had previously reached a new rally high of 14,583 points and supported hopes that prices would continue to rise.
Another number is likely to give the US Federal Reserve a lot more headaches: wages are rising faster again. This ends a seven-month trend. The danger of the so dreaded wage-price spiral is far from over.
Despite the strong labor market report, capital market expert Thomas Altmann still thinks it is likely that the US Federal Reserve will raise interest rates more slowly from the upcoming December meeting. In his opinion, the giant steps of 75 basis points should be a thing of the past. However, 50 basis point steps could now accompany us longer than previously thought.
Also read: Fed Chair Powell – Could slow rate hike pace as early as December
The previous trading week and especially Thursday had shown how difficult it was for the Dax to break the 14,500 point mark. Since Monday last week, the leading index has been listed in a range of comparatively low 250 points.
On the upper side it was 14,571 points until Friday, below the mark of 14,321 points. This mark also held on Friday. The daily low is 14,372 points.
Because on the underside, the Dax is considered to be well supported in the short term. According to data from the analysis company Animusx, the cash quota among investors is high enough to avoid major price losses. According to chart technology, if the lower mark is broken, the area around 14,150 points is the next point of contact, which would only be a minus of around 400 points compared to the high of this 2700-point rally since the end of September to 14,571 points.
Support for the Dax comes from the USA: There the S&P 500 surpassed the much-noticed 200-day line on Tuesday, around two weeks after the Dax, and remains above this mark. The fact that the German stock market index is a quasi trendsetter for the big “US brother” is quite an unusual event.
On the German stock market, this average line, formed from the prices of the past 200 trading days, is currently falling by around two points and is at 13,538 points. This line should turn by January 2023 at the latest and then be “tested” again by the leading index. At least that is what the typical scenario of a sustainable trend reversal looks like, about which there has been no doubt so far.
Inflation is a thing of the past on the foreign exchange market
Meanwhile, the comeback of the euro continues. At a rate of 1.054 dollars, the common currency has since traded as high as it was last in June. In the past four weeks, the euro has climbed more than 7 percent against the dollar.
Commerzbank foreign exchange analyst Ulrich Leuchtmann is also surprised by the speed with which the foreign exchange market anticipates future developments. It is about pricing out the fear of inflation on the foreign exchange market, which is now running faster than expected.
A significant drop in inflation now seems so certain that the time after that is now “played” on the foreign exchange market. And it doesn’t look positive for the dollar because inflation was the trigger for the aggressive Fed policy that propelled the dollar to the top of the G10 currencies, the world’s major currency pairs, in 2022, says Leuchtmann.
He sees the greatest risk in Commerzbank’s price target of $1.10 against the euro being reached earlier than expected. But the US job data also had an impact on the euro rate, which fell 0.7 percent due to a prolonged phase of interest rate hikes and is now $1,045.
Look at individual values
Real estate values: Real estate values, which are considered interest-sensitive, are in demand on the stock market. Vonovia ended up at the top of the Dax with an increase of almost three percent, industry members such as Aroundtown and Tag Immobilien rose by 4.7 percent and 3.8 percent respectively, LEG and Deutsche Wohnen each climbed by more than two and a half percent.
With Grand City at the top of the SDax, the increase was almost 5.7 percent. Shares in the real estate investment provider Patrizia advanced by 2.4 percent, with an increased portfolio forecast following an acquisition in Denmark also providing tailwind.
stabilizer: The company’s dividend proposal has been well received by investors. The titles gain 1.7 percent to 63.05 euros. The industrial and automotive supplier proposes a dividend of 1.75 euros per share for 2022, 50 cents more than in the previous year. “This is clearly above market expectations,” said one trader.
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