Dusseldorf The Dax expands its consolidation. The leading German index closes about 0.6 percent lower at 14,261 points. Both in the course of trading on Wednesday and on Tuesday, the stock market barometer slipped below the threshold of its two-week trading range – which should result in further price losses.
Jochen Stanzl, analyst at online broker CMC Markets, sums it up: “It’s the reason that many have been looking for to take profits after the strong rally: the uncertainty about what follows next week from a monetary policy perspective.”
The next support is in a range between 14,150 points, the lowest point of the mini-consolidation in mid-November, and the high of August at 13,948 points. Martin Utschneider, technical analyst at private bank Donner & Reuschel, expected a Dax trading range on Wednesday between 14,343 points on the top and 14,157 points on the bottom. With today’s daily low of 14,218 points, the leading index was not far away from this support.
But even if the Dax should fall to the 14,000 point mark, that would only be a fall of four percent, i.e. more of a smaller, healthy consolidation. Drops of at least six to seven percent are usual, but there has not been such a major setback in the course of the 2700-point rally since the end of September.
Top jobs of the day
Find the best jobs now and
be notified by email.
The chance for brokers to find an entry level that was attractive to them was correspondingly low. And the number of those waiting for it should be correspondingly high.
The 200-day line currently at 13,538 points offers strategic investors a good support level. This line – the average of the past 200 trading days – falls only minimally and is likely to turn around and rise again in the coming trading weeks. The usual scenario of a sustainable trend reversal then provides for a renewed test of this line.
>> Read also: Ten favorite stocks that stock market experts are now getting into
Sustained listings below 14,000 points are unlikely until Thursday next week. Because on Wednesday evening (December 14) after the market close in Germany, the US Federal Reserve will explain its interest rate decision. After that, the cards on the stock market are likely to be reshuffled.
The market’s baseline scenario remains that the Fed will slow its pace of rate hikes, raising interest rates by just 50 basis points. Nevertheless, the stronger the economic data from the USA that is published by this point in time, the higher the risk of further price declines on the Dax. Data on the development of producer prices and inflation expectations will come on Friday, and inflation data for November on Tuesday.
In the event of strong US data, the market would have to reconsider the interest rate assessment mentioned. For a more fundamental adjustment of market expectations, the stock market players will wait for the interest rate decision and the new forecasts from the US Federal Reserve.
>> Read here: Why positive US economic data is bad for stock prices
The news from China also signaled support against massive price losses in the coming trading days. In the Middle Kingdom, the corona restrictions are being relaxed nationwide, which should primarily benefit export-dependent German stocks.
The disappointing trade data from China is not a major burden for this reason. They show that the strict zero-Covid policy has hit the economy there even more than feared. But that should change with the easing.
Oil prices are back in the red after a brief rise
After the high losses on Tuesday, oil prices have eased again for a while. In the morning, a barrel (159 liters) of North Sea Brent cost 14 cents more than the day before. In the afternoon, however, the price went down again. Most recently, a barrel of Brent cost about $78.60, about 1.4 percent less. The price for a barrel of the American West Texas Intermediate (WTI) variety was around $1.30 lower at $73.17 in the afternoon. The Brent price slipped by almost four percent on Tuesday. Since July 1 of this year, the minus has been around 30 percent.
Oil prices have come under increasing pressure in recent days. Concerns about economic development are decisive. The consequences of the Ukraine war and the significant interest rate hikes by many central banks are dampening the mood on the crude oil market considerably. The easing in China can currently do little to counteract this.
Look at the individual values
Airbus: After the aircraft manufacturer will miss its delivery target for 2022, the shares are falling. In Frankfurt it is about 2.2 percent down. It was to be expected that the target of 700 commercial aircraft would not be reached this year, said a dealer. The reduced A320 delivery targets for 2023 and 2024 would weigh more heavily.
Gerresheimer: The papers are down 6.3 percent at EUR 61.40, making them one of the biggest losers in the MDax. Investors cashed in on Tuesday after presenting the packaging manufacturer’s short- and medium-term growth targets. The title had slipped by 7.5 percent. Looking at the past three months, they are still around 30 percent up.
DWS: The Deutsche Bank fund subsidiary sets new profit and savings targets and promises its investors higher dividends. The stock climbed 2.7 percent.
Morphosys: The prospect of payments under a licensing agreement with Novartis is helping the share price. The stocks are up 1.2 percent. For exclusive rights to preclinical inhibitors of a potential new cancer drug, the biotech company will receive an upfront payment of 23 million dollars from the Swiss company, plus milestone payments.
KWS seed: The seed manufacturer’s shares are traded on Wednesday with a dividend discount of 0.80 euros. The closing price on Tuesday was EUR 66.40, at the close of trading the price was EUR 63.50, minus 4.4 percent without taking into account the dividend payment.
Here you can go to the page with the Dax course, here you can find the current tops & flops in the Dax.