Dusseldorf At the start of the week, the Dax slipped back below the 14,000 point mark. The Dax closed Monday trading 1.1 percent lower at 13,939 points.
There was an interesting course of trading: After a reasonably stable start, the Dax fell back significantly to up to 13,778 points in the morning. But just as quickly, bargain hunters stepped into action again and heaved the leading index back towards 14,000 points.
The EuroStoxx50 and the broad Stoxx600 each slipped three percent, but were also able to pare their losses later on. The same applies to the leading Stockholm index, which at times fell by eight percent. Even there, the spook was over quickly.
The sell-off doesn’t appear to be due to a specific headline, said Martin Munk, equity expert at Jyske Bank. “An investor must have taken the stock market adage ‘Sell in May and go away’ too literally,” joked one stock trader. Another stock marketer tapped on a cascade of automated sales.
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Trading on Monday shows that recovery phases in the Dax do not last long. Or as Robert Halver, capital market expert at Baader Bank, puts it: “The stock market bull is on sabbatical.”
In view of the economic skepticism and the forthcoming interest rate hikes by the central banks, only a few investors are apparently willing to buy shares out of long-term conviction. This is understandable, as can be seen from the data from the US company Caterpillar. The world’s largest construction machinery manufacturer is a valid leading economic indicator and recently reported a weaker sales development compared to the previous year.
It is therefore worthwhile for medium-term investors to continue to observe the chart and market patterns and tendencies. They have already provided good orientation in the past few weeks.
In the medium term, the following still applies: only with sustainable prices above 15,000 points does there is a chance of a reasonably good year on the stock market. The downward trend line since the annual high of 16,285 points on January 5 would have been broken at around 14,300 points.
The stock market month of April has calmed the situation down
A look at the long-term trend using monthly charts shows that the situation on the German stock market calmed down in April. The range for the past month has been within the highs and lows of March.
Price capers on Europe’s stock exchanges
Accordingly, prices above 14,603 points, last month’s high, and below 13,566 points, the April low, would signal relaxation or new downward momentum.
Investor sentiment supports the market
The extremely pessimistic mood among investors, which has been extremely pessimistic for a long time, is currently having a supportive effect on the price. In the US, the number of bulls expecting prices to rise is at an all-time low. And the mood of investors in the Handelsblatt survey Dax-Sentiment has been negative for 17 weeks, the highest value since the survey began.
These are contraindicators. The reasoning behind this is that if investors are pessimistic, the majority of them have not invested. Then only a few can sell and thus depress the courses.
“The fact that investors have already positioned themselves accordingly in anticipation of falling prices speaks against a dramatic panic sale and massive setbacks,” agrees Robert Halver. “Conversely, with sustained positive impulses, skepticism can quickly turn into a willingness to buy, which is not to be expected in the short term.”
Look at individual values
Eagle groups: Investors are punishing the real estate group for billions in losses and a consolidated balance sheet without a seal of approval: the share of the SDax-listed company fell by more than 40 percent at times. At the end of trading, it was 29 percent lower at EUR 5.12.
The stock could soon be excluded from the small-cap index, at least temporarily. Since the Wirecard bankruptcy, stricter rules have applied to the members of the Dax indices. You must publish audited annual results within 90 days of the end of the financial year. Although the deadline can be extended to up to four months, this period also expires at midnight for the Adler Group.
Deutsche Bank: The American voting rights advisor Glass Lewis sharply criticizes the compensation system for the board members of Deutsche Bank. Glass Lewis advised shareholders to vote against the compensation system at the AGM on May 19. The stock recovered its slight losses and ended up gaining 0.4 percent.
Wind power values: Vestas lost almost eight percent in Copenhagen. The wind turbine builder made a surprisingly high quarterly operating loss of 329 million euros and warned of a negative margin of minus five percent for the year as a whole. The only ray of hope are the order backlog and the higher prices for new orders, said analyst Per Hansen from the financial services provider Nordnet. In the wake of Vestas, the stocks of Nordex and Siemens Gamesa fell by up to five percent.
PVA Tepla: An order from the chip company STMicro to supply crystal growing systems initially encouraged investors to invest in PVA TePla. The shares of the technology company later turned negative and lost two percent at the end of trading.
Here you can go to the page with the Dax course, here you can find the current tops & flops in the Dax.