Dusseldorf The German stock market is benefiting from the friendlier mood in the USA. After a hesitant start, the leading German index Dax closed 0.6 percent higher on Wednesday, just above the 14,000 point mark.
Experts such as analyst Jochen Stanzl from CMC Markets remain cautious: “The early summer lethargy is spreading on the German stock market.” Investors have come to terms with the fact that there will be no quick end to the war in Ukraine. At the same time, they had braced themselves for higher inflation for a longer period of time and faster rate hikes.
So the burdens are priced in, but there is no catalyst for a sustainable jump upwards. Investors always react to price gains by quickly taking profits. As a result, the Dax has been moving sideways for a week and a half.
The said 14,000 point level has turned into a persistent resistance. In the past eight trading days, the Dax has closed four times above the psychologically important thousand mark and four times below it. And at the end of trading on Wednesday, there was de facto parity.
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On Wednesday, among other things, the economic figures from Germany supported the courses. Despite the corona crisis and the war in Ukraine, gross domestic product increased by 0.2 percent quarter-on-quarter between January and March, as the Federal Statistical Office confirmed an earlier estimate on Wednesday. The economy thus prevented a slide into recession.
However, consumer sentiment remains very subdued. The barometer of the GfK market researchers in Nuremberg signals only a small increase for June after the most recent slump. It increases by 0.6 points to minus 26.0 points, as GfK announced on Wednesday. Despite the improvement, the level remains extremely low, explained the Nuremberg consumer researchers.
Nevertheless, since the beginning of the year, analysts have continued to raise their profit expectations for companies on average, explains Stanzl: “So while a historic rise in interest rates lowered the valuation multiples on the market, the profitability of companies improved at the same time.”
This is a good sign for the stability of the entire stock market. “However, that doesn’t mean that stocks can’t correct further,” warns Stanzl.
Here is a look at the USA. There, on Tuesday, Snapchat operator Snap’s profit warning pulled the entire market down. There is a small recovery on Wednesday, but the market-wide S&P 500 index remains below the critical 4000 point mark in early trading and is therefore still considered battered. A new wave of sales should also hit the German market.
>> Read about this: Prices on US stock exchanges are likely to fall further: experts expect a second wave of sales
After the market closes, investors therefore look at the minutes of the last meeting of the US Federal Reserve, which will be published in the evening (8 p.m. German time). At the beginning of May, the monetary authorities increased the key interest rate by 50 instead of 25 basis points for the first time in 22 years.
The market is now hoping for further indications of the future interest rate path, and recently there has even been speculation about a possible interest rate hike of 75 basis points. However, analyst Raffi Boyadjian from brokerage house XM explains. “Recent economic data, which is anything but robust, is fueling speculation that the Fed may not have to raise rates as aggressively as originally thought.”
Individual values in focus
Delivery Hero: Growth stocks were among the winners again after the significant discounts of the previous day. Delivery Hero (7.3 percent), Hellofresh (4.8 percent) and Zalando (four percent) were the three strongest Dax stocks. The opposite was the case the day before.
eon and RWE: The two energy companies were among the winners in the Dax: Eon gained 1.5 percent, RWE’s share about two. They are recovering somewhat from losses the day before, when a press report about an imminent special tax on high profits from electricity producers in Great Britain weighed heavily on the industry.
Nordex: The shares of the wind power company fell by more than 20 percent at times. After the close of trading on Tuesday evening, Nordex announced that it would only expect to be in the black this year in the best-case scenario. Instead of a profit margin (Ebitda margin) of one to 3.5 percent, the board now expects minus four to zero percent, the SDax company announced. At the end of trading, the minus was 17 percent.
CTS Eventim: In the MDax, the shares of the ticket marketer and event organizer fell by around six percent. The French investment house Exane BNP advises to sell.
Curevac: The Tübingen biotech company continues to struggle with the costs of its failed corona vaccine from last year. This was announced by Curevac. The loss in the first quarter of 2022 amounted to 15.2 million euros (2021: 112.2 million euros). The stock lost about four percent. On a 52-week perspective, the minus is more than 80 percent.
Aroundtown: The real estate company grew in the first quarter. The core value FFO I, which is decisive in the industry, climbed by three percent to EUR 89.3 million. The Board of Directors reaffirmed its goals for the year. The share still loses around 0.8 percent.
Ex-dividend: The following companies are traded today with a dividend discount: Hugo Boss, Baywa, Knorr Bremse.
Here you can go to the page with the Dax course, here you can find the current tops & flops in the Dax.