Dusseldorf The leading German index was in the red for most of the day on Wednesday. But after a friendly opening of the US stock exchanges, the Dax turned positive and closed 0.35 percent higher at 12,915 points. However, the starting position for the stock market barometer has not improved. Prices above the 13,000 mark are necessary for this.
This means that the Dax remains focused on the low from the previous week at a good 12,600 points. This area was successfully tested again on Monday of this week.
In the best case, the German index forms a stable base in this area. In the negative case, the leading index slides towards the low for the year, which is 12,390 points.
For Martin Utschneider, technical analyst at the private bank Donner & Reuschel, “investors and investors must continue to align themselves downwards”. In his opinion, yesterday’s high of 12,928 points also confirmed the downward trend. The falling trendline has been in this area since mid-August.
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According to the stock market expert Anton Riedl, the Dax would have to overcome the entire price range between 13,600 and 14,000 points dynamically and driven by broad-based purchases for a real trend reversal. “In view of the tightened monetary policy and the forthcoming central bank decisions in September, this is unlikely to be possible,” he concludes.
Little edification for rising prices comes from the short sellers. The famous Ray Dalio, founder of the world’s largest hedge fund Bridgewater, has been counting on falling prices by means of so-called short sales since mid-July.
Although he reduced his bets in August during the recovery rally in the markets, he increased them again earlier in the month. In the Dax alone, he is currently betting on falling share prices at eight companies, according to data from the Federal Gazette on Monday.
Utility stocks are rising sharply
Utilities stocks rose sharply on Wednesday after a report on electricity price caps in Europe. The shares of the energy companies RWE, Verbund and Engie increased their price gains significantly and pulled the European sector index up by four percent at the top. RWE led the Dax winners with an increase of up to 7.2 percent, Verbund was at the top in Vienna with 13.3 percent, Engie gained up to 4.8 percent in Paris.
Market participants referred to a report that Brussels may want to impose a price cap of EUR 200 per megawatt hour for electricity that is not generated using gas. This would benefit producers of renewable energies, said a trader. At Jefferies, it was said that if the stated ceiling were to come true, it would be a better-than-expected result for the utilities.
Bond yields at a three-month high
The weak development on the stock market is accompanied by rising yields on government bonds. The value of a ten-year federal bond was now 1.636 percent, the highest level since the end of June this year. The two-year federal bond, which reacts more strongly to interest rate expectations, is only just below its ten-year high of 1.2 percent at 1.1 percent.
There is a similar picture in the USA. There, the ten-year government bond is also trading at 3.36 percent, its highest level since mid-June 2022.
It should only be a matter of time before the world’s two most important bond barometers climb above their June yield peaks, which marked a new ten-year high. In this environment, it is becoming more and more likely that the European central bank ECB will decide to raise interest rates on Thursday and the American Fed at the end of September.
Gas price falls for second day in a row
The gas market is down for the second day in a row. The price of the October futures contract TTF is currently listed at 213 euros per megawatt hour, a minus of ten percent. The TTF contract is often used as a guide to European price levels.
The price is thus well below the high of Monday this week, when it has meanwhile jumped by 35 percent to up to 284 euros per megawatt hour. In view of well-stocked inventories in Europe, the fear of gas bottlenecks in winter is disappearing, which is also likely to have driven speculators out of the market.
Oil prices are currently trading below the level before the outbreak of war in Ukraine. The price of Brent crude oil from the North Sea slipped around 1.6 percent to a seven-month low of $91.30.
“Despite some better-than-expected US services data, global growth is not looking good at all and that’s a problem for crude oil prices,” says analyst Edward Moya of broker Oanda. It is therefore not surprising that the price is falling despite the OPEC plus announced cuts in production at the beginning of the week.
Look at the individual values
SAP: The long-term price picture for the Dax heavyweight is very explosive. The SAP paper is currently focusing on the important support zone around 95 euros, which was not fallen below even during the corona crash in mid-March. Today, Wednesday, the share is trading at EUR 85.48, almost unchanged from the previous day. If the share does not soon recover above 95 euros, the entire upward trend of the past 20 years threatens to tip over at SAP.
SiemensEnergy: Siemens Energy shares fell 3.5 percent after issuing a mandatory convertible bond to finance the announced complete takeover of Siemens Gamesa. “The new financing for Gamesa comes as no surprise, but the dilutive effect is still negative for the price,” said one trader.
Handle: In the leading index Dax 40, the papers of the consumer goods manufacturer lost 0.4 percent on Wednesday. Warburg Research canceled the buy recommendation. The prospects for the adhesives division were gloomy, it said.
Unipers: For the ailing utility, the downturn in the gas crisis continues with a record low. Most recently, the titles at the MDax end posted a minus of 4.7 percent. The new record low is 4.19 euros, which corresponds to a minus of 10.9 percent.
SGL Carbon: The shares of the carbon specialist also went up by more than twelve percent after the outlook was raised. The stocks will be listed in the small-caps index SDax again from September 19th.
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