Dusseldorf Is there a deceptive calm on the German stock market? The leading German index has been moving sideways in a range of around 200 points for two weeks. On the upper side it ends at around 15,900 points, on the lower side there is greater willingness to buy at 15,700 points.
On today’s trading day, the Dax initially remained in this range and was quoted at 15,740 points in morning trading, a minus of 0.4 percent.
But now investors are increasingly relying on market turbulence. “Everyone is waiting for the bang,” says behavioral economist Joachim Goldberg after evaluating the Frankfurt Stock Exchange survey of institutional and private investors. Apparently, a majority no longer wants to rely on the old stock exchange rule “quiet market, low risk”.
Private investors in particular are now increasingly relying on falling prices and are approaching the behavior of professionals who have been pessimistic for a long time. This is shown not only by the Frankfurt survey, but also by the Euwax indicator of the Stuttgart Stock Exchange, where primarily private investors trade. The proportion of put leverage products on the Dax has increased significantly in the past few days.
Behind this mounting pessimism is a desire for a scenario that Goldberg outlines as follows: Rapid increase in volatility, ending with a 3-4% one-day slide. That would be quick profits by selling the short positions and at the same time a cheap new entry opportunity.
As in the previous week, the behavioral economist expects demand at 15,350 to 15,400 points at the latest. This level should support the leading German index, giving the market a favorable starting point for further price increases.
Because experienced stockbrokers know: The more investors rely on a scenario, the less likely it is that it will occur. Goldberg also doubts such a rapid slide in prices with an optimal entry scenario for private individuals and professionals. Even if this scenario were to occur, the upward trend in the leading German index would still remain intact.
On the part of the chart technology, there is even a small glimmer of hope. The high buy-back tendency on yesterday’s trading day is a positive signal. If there are follow-up purchases this Thursday, Martin Utschneider, technical analyst at private bank Donner & Reuschel, believes that there will be a high for the year. The previous one was 15,919 points. Utschneider’s short-term price target is 16,660 points, which would be a new record high.
Headwind from the USA
What is missing, however, is tailwind from the USA. There was even a headwind from Wall Street yesterday, Wednesday, with the major indices falling slightly.
The banking crisis is by no means the only issue that is a burden. The still unresolved dispute over escalating the US debt crisis is becoming an ever greater risk on the stock exchanges. This can be seen in particular from the steadily increasing premiums for credit default swaps (CDS) for US government bonds.
According to Thomas Altmann, “no one wants to believe that the world’s largest economy will default”. But the costs of hedging against a US default are currently skyrocketing.
“For a short term of one year, it is now more expensive to insure against default on US government bonds than on Brazilian or Colombian government bonds,” calculates Altmann.
US stock market expert Koch: “First Republic will be the new problem child”
Look at individual values
Deutsche Bank: Thanks to higher earnings in the corporate bank, the financial institution started the year better than it has in a long time. “With 7.7 billion euros, we achieved the highest earnings in a quarter since 2016, the pre-tax profit of 1.9 billion euros was the best result since 2013,” emphasized CEO Christian Sewing in a message to employees. Nevertheless, the bank also announced a sharper austerity course. This news, however, causes a minus of two percent.
Aixtron: Higher costs have burdened the chip system manufacturer, the share slips by seven percent. Due to continued strong demand and stable supply chains, the Management Board expects significant growth with increasing margins for 2023 and therefore confirms its annual targets.
hellofresh: An increase in order value gives the company a record quarterly turnover. At the same time, the drop in profits of the recipe box mailer at the beginning of the year was less severe than feared. That is why the share is at the top of the MDax small-cap index with an increase of almost seven percent.
Two stocks are trading at a dividend discount today, Thursday. The RTL Group pays 3.40 euros, the closing price on Wednesday was 48.25. The construction group Hochtief pays four euros at a closing price of the previous day of 80.70 euros.
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