Dusseldorf The Dax failed on Monday with its first attack on the 15,600 mark. The German benchmark index rose to 15,606 around noon, but then fell again. Most recently, the Frankfurt stock exchange barometer was 0.2 percent up at 15,580 points.
The Dax ended last week on Friday with an increase of 0.5 percent at 15,543 points, but lost 0.3 percent on a weekly basis. Nevertheless, the latest upward trend remained intact, as the leading index achieved both higher weekly highs than in the previous week (15,615 versus 15,599 points) and higher weekly lows (15,407 versus 15,012 points) – the classic definition of an upward movement.
If this trend continues, it now depends on whether the Dax sustainably exceeds the 15,600 mark. “If successful, the barriers define a first target at 15,800 points before the previous all-time high of 16,030 points comes back into focus”, explain the chart technicians at HSBC.
The reporting season, which is picking up speed this week, could act as a catalyst: half a dozen companies are providing figures from the Dax alone – including Deutsche Bank and the car manufacturer Daimler.
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Investors and analysts expect a significant increase in profits. “If the reporting season in this country brings quarterly figures that are as strong as in the USA, it could be a good week on the Frankfurt Stock Exchange,” predicts Jochen Stanzl from CMC Market.
In the USA, however, it has been shown that rising profits do not automatically mean rising prices. So far, less than 20 percent of companies have missed the forecast, as Ulrich Stephan, chief investment strategist for private and corporate customers at Deutsche Bank, calculated.
The shares of companies whose profits exceeded the analysts’ estimates, however, closed the trading day only marginally better. Corporations that missed expectations, on the other hand, ended trading almost 4.5 percent lower. This shows that in an environment of high profit expectations, any disappointment can quickly lead to price losses.
On the economic side, significant disruptions in international trade in goods have recently caused great uncertainty. As a result, the mood in the boardrooms of German companies deteriorated for the fourth time in a row in October. The Ifo business climate index fell to 97.7 points from 98.9 points in September, as the Munich economic research institute announced on Monday for its survey of 9,000 executives. Experts polled by Reuters had expected a drop to 97.9 points.
“Delivery problems are causing problems for companies,” said Ifo President Clemens Fuest. Capacity utilization in industry is falling. “Sand in the gears of the German economy is holding back the recovery.” The managers were more skeptical about their situation and the business outlook for the next six months than they were before.
Look at individual values
SAP: The shares of the software company increase by more than two percent. According to a notification of voting rights on Friday evening, the chairman of the supervisory board, Hasso Plattner, used the price slide as a result of the figures for the third quarter to buy shares worth millions.
MTU Aero Engines: After a buy recommendation, the shares of the engine manufacturer in the Dax rose by more than one percent, most recently a plus of 0.1 percent. The analysts at Stifel have upgraded the stocks to “buy” from “hold”.
Zooplus: The previously rival bidders, the financial investor Hellman & Friedman and the Swedish investment company EQT, now want to jointly take over the online pet supplies retailer Zooplus. It would be offered 480 euros per Zooplus share, announced Zooplus surprisingly on Monday. That corresponds to around 3.7 billion euros including debt. This is above the previous offer of 470 euros per share. On Friday the paper went out of trading at 475.40 euros. On Monday the share rose by 0.6 percent to 478.40 euros.
Auto1: The shares of the online used car dealer fall in the MDax by almost five percent. In the past five trading days, the titles had gained more than ten percent. The analysts of Deutsche Bank lowered the target price for the shares on Monday from 58 to 50 euros.
Adva: The papers of the telecom equipment supplier continue their recent slide and, as the bottom of the list, lose almost four percent in the SDax small-cap index. Commerzbank expert Michael Junghans sees Adva on the one hand positive demand and on the other hand increasing cost pressure. Profitability suffered badly as a result.
Atoss: The Munich-based provider of personnel management software has increased its sales. The revenues climbed from January to September by 14 percent to 69.5 million euros, such as Atoss Software announced. The operating result (EBIT) increased by almost seven percent to 18.6 million euros. The company also confirmed its outlook. Atoss shares rise by 0.7 percent.
Turkish lira falls to new record low
The decline in the Turkish lira continues, in return the US dollar rises to 9.8545 lira per dollar and the euro to 11.4432 lira per euro – both record levels. After the unexpectedly sharp interest rate cut by the Turkish central bank on Thursday, Turkish President Recep Tayyip Erdogan’s verbal attack on the ambassadors of Germany, the USA and eight other western countries of the currency continued over the weekend. The background to this are demands for the release of the Turkish entrepreneur and culture promoter Osman Kavala.
The development is by no means just a political dispute, explains Commerzbank analyst Ulrich Leuchtmann: “Turkey depends on prosperous trade with the rest of the world. The country is isolating itself from the West too quickly, not only politically but also economically. “
The analysts at LBBW therefore fear that the current developments could lead to a further deterioration in the already very fragile economic situation in Turkey. According to Commerzbank expert Leuchtmann, Turkey could focus on trade with Russia and China in the long term, but such a restructuring of foreign trade relations would take years or decades and would involve adjustment costs. “At least during this time it would be questionable how Turkey could bring its balance of payments into equilibrium without the lira weakness.”
Leuchtmann also considers it possible that the foreign policy dispute was Erdogan’s diversionary maneuver. Because the trigger for the current weakness of the lira is its influence on monetary policy. This makes imported goods such as energy expensive, and loans in foreign currencies also become more expensive in real terms.
“If politics creates foreign enemy images, it is easier to sell the burdens from the weak lira as a necessary price for political autonomy,” explains Leuchtmann. “But that also means that a monetary policy U-turn appears less likely.” As a result, the foreign exchange market could move the exchange rate paths closer to the collapse scenario without worrying about emergency interest rate hikes.
Oil prices rise to multi-year highs
Oil prices continued to rise at the beginning of the new week and reached multi-year highs. While the price of North Sea oil rose to its highest level in about three years, the US oil price hit a high in about seven years.
On Monday morning a barrel (159 liters) of the North Sea variety Brent cost 86.22 US dollars. That was 69 cents more than on Friday. The price of a barrel of the American West Texas Intermediate (WTI) rose 77 cents to $ 84.53. At the peak, both prices had risen a little higher.
The price drivers on the crude oil market have been the same for several weeks: While there is a high demand for energy worldwide, the supply is limited for various reasons. That drives up the prices of gas, coal and oil. The oil network Opec plus is constantly expanding its production. However, according to experts, the increasing supply cannot keep pace with the high demand due to the economic situation.
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