The 14,000 point level has become a key resistance.
(Photo: Bloomberg Creative/Getty Images [M])
Frankfurt The German stock market started the new week with significant gains: Shortly after the start of trading, the leading German index was temporarily above the 14,600 point mark, before falling slightly below this level.
About an hour after the start of trading, the leading German index is 0.7 percent higher at 14,557 points. The equally friendly markets in Asia, but also the good indications from Wall Street, contribute to the good mood.
With a positive weekly balance, the US stock markets had ended the seven-week longest series of losses in decades. One important reason is the growing conviction that inflation has now peaked and that the central bank can raise interest rates further without the economy slipping into recession.
Inflation biggest topic of the day
These considerations are also crucial for Monday trading on the local stock exchange, since the May inflation number for Germany will be published at 2 p.m. The inflation rate for April was 7.4 percent. Despite the explosive number, a consistently quiet trading day is possible because important financial players are absent due to a public holiday in the USA.
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On Tuesday, in addition to local inflation, other economic data will come to the fore. So the EU inflation for May, the German unemployment figures for the same month as well as in the US information on retail sales, a purchasing manager index and consumer confidence are on the daily calendar.
Irrespective of immediate daily events, the current stock market assessments show that analysts are primarily concerned with interest rate, inflation and economic prospects. The experts come to very different conclusions here.
Skepticism about European equities
The professionals at BCA Research are still cautious about investments in Europe. “The ECB will pause on rising interest rates after raising its deposit rate to zero in the third quarter,” the experts wrote. Inflation is the driving factor for higher interest rates and inflation will peak in the summer. But because of the general economic risks, European assets are not yet a purchase.
US economist Gary Shilling sees things differently. He, too, estimates that inflation is already at a high. But the US Federal Reserve’s rate hike and stock market slump pointed to a global recession. “A bear market and with it a period of falling prices has begun,” he believes. The European markets would not be able to escape this.
Euro at its highest level in five weeks
The shared currency rose 0.4 percent to $1.0769, marking its highest level in five weeks. The dollar index, meanwhile, fell 0.3 percent to a five-week low of 101.3890. In view of the German inflation figures, which are expected to rise again in a month-on-month comparison, there is no reason to reduce interest rate expectations with regard to the ECB, the analysts at Helaba state.
It is also clear to the LBBW experts: ECB boss Christine Lagarde has recently acknowledged more clearly than before that monetary policy in the euro area is at a real turning point. “Accordingly, a key interest rate turnaround at the meeting after next should be a foregone conclusion.”
Individual values in focus
Siemens: Siemens presented itself as the winner in the Dax at the start of trading on Monday. The group reported at the weekend that it had received an order to build a large high-speed train system in Egypt. It is the largest order in the company’s history. The course reacted to this with an increase of more than three percent.
Rheinmetall: The leader in the MDax was Rheinmetall in early trading. The arms manufacturer’s stock gains around four percent. The course was driven by the 100 billion euro program for the Bundeswehr. The price has more than doubled in just a few months.
Aareal Bank: The course of the real estate financier in the SDax is slightly. The financial investors Advent, Centerbridge and the Canadian state pension fund CPPIB could possibly take over Aareal Bank this year. With their two billion euro takeover bid, they collected a total of 74.62 percent of the shares in the Wiesbaden real estate financier.
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