Frankfurt The German stock market extended its recent gains on Friday. The German leading index Dax ended the last day of the trading week 1.6 percent higher at 14,462 points, which also corresponds to the daily high. The Dax last closed this high on April 21.
Trading on Friday could provide new stability. In the past two weeks, profit-taking set in relatively quickly when the Dax was above the 14,000 point mark. Instead, trading on Thursday and Friday continued to rise in slow steps. The new week will show how sustainable this stability is.
Figures from the USA in particular ensure a good mood. Because, as the US Department of Commerce announced, although high inflation reduced Americans’ personal incomes in April, annual inflation (core PCE rate) excluding food and energy costs fell slightly to 4.9 percent from 5.2 percent.
“It looks like the inflation wave has peaked,” commented analyst Bastian Hepperle from the private bank Hauck Aufhäuser Lampe. The courses on Wall Street rose accordingly, which provided an additional boost in this country.
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This reinforces the hope of many investors that the US Federal Reserve will not have to tighten monetary policy even more than already expected. In addition, one or the other bargain hunter apparently still senses a chance to stock up cheaply, said Naeem Aslam, chief market analyst at brokerage house AvaTrade.
This has brightened the mood this week, especially on Wall Street, after it was last on the bottom. “Very negative sentiment leaves room for bear market rallies,” explains Konstantin Oldenburger, market analyst at CMC Markets. “The starting signal could have been given for such a week.”
A bear market refers to a prolonged period of falling prices in the stock market. A bear market rally describes the situation in which prices rise sharply again for a shorter period of time before the downward trend resumes.
What speaks for Oldenburger’s point of view: Even if the overall situation is difficult with the Ukraine war, high inflation worldwide, the interest rate increases necessary to combat inflation and the resulting fears of recession and corona concerns in China, the Dax has now had the third positive week in a row itself.
For the week ended May 13, it was up 2.6 percent. In contrast to the previous weeks, there was no large-scale profit-taking, but the Dax held its level in the week to May 20 with a weekly loss of 0.3 percent. This week the index has now achieved a weekly gain of over three percent.
100-day moving average is now within reach
The Dax has thus established itself above the 14,000 point mark, which it had been working on since the beginning of May. It is not uncommon for this to be followed by a breakout to the upside. From a technical point of view, the downward trend that has persisted since the beginning of the year has been abandoned for good. The Dax has meanwhile moved away from its May low of 13,381 points.
From a technical point of view, the 100-day line at 14,565 points is getting closer, write Ralfcircul and Ulrich Wortberg from Helaba in their current analysis. This line shows the moving average over this period and the medium-term trend.
But the mark of 14,980 points is crucial for a real recovery, says Martin Utschneider, Head of Technical Analysis at Donner & Reuschel. At the end of March, an attempt at recovery failed here.
However, the strong end to the week makes the experts optimistic. The brand is “a realistic goal for the next few weeks,” says Utschneider. According to Utschneider, the range from 14,041 to 13,871 points on the underside offers a reliable stop orientation.
Individual values in focus
Beiersdorf: Strong business figures from US cosmetics retailer Ulta Beauty are encouraging investors to invest in European suppliers of beauty care products such as Beiersdorf and L’Oreal. Ulta exceeded expectations with full-year sales of $2.3 billion and earnings of $6.30 per share, praises JP Morgan analyst Christopher Horvers. The increased targets for 2022/23 are conservative with $9.35 to $9.55 billion in sales and $19.20 to $20.10 per share in earnings. The Ulta titles listed in Frankfurt rose by 14 percent, as strongly as they did a year and a half ago.
Handle: A negative analyst comment triggers sales at the consumer goods manufacturer. Henkel shares fell by 1.7 percent to 61.60 euros. The experts at the investment bank Jefferies downgraded the title to “hold” from “buy” and lowered the price target to 69 from 75 euros.
RWE: The suppliers RWE and Eon were the biggest Dax losers with a loss of three and 2.3 percent respectively. Overall, both titles have had a weak trading week.
Oil posts strong gains on a weekly basis
Oil prices held up yesterday’s strong gains on Friday. In the evening, a barrel (159 liters) of North Sea Brent cost $118.62, according to Refinitiv data. That was about one percent more than the day before. The price of a barrel of the US West Texas Intermediate (WTI) variety rose slightly to $114.35.
Ahead of the weekend, oil prices were supported by a weaker dollar after disappointing economic data from the US. A weakness in the US currency makes crude oil traded in dollars cheaper on the world market, which ensures stronger demand.
Since Monday, crude oil from the North Sea and US oil have each increased in price by more than four percent. Market observers referred to the development of fuel reserves in the USA. During the week it was announced that US gasoline reserves had reached a multi-year low.
With material from dpa and Reuters.
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