Dusseldorf The German stock market is on the up again. According to the US labor market report, the Dax has continued its rally since the end of September and reached a new high of 13,542 points in this upward trend. At the end of the market, the leading index was at 13,459 points, an increase of 2.5 percent or around 330 points.
If the Dax stays above the 13,400 mark for a long time, the chances of further price gains are great. For Jörg Scherer, technical analyst at HSBC Germany, the area at around 13,400 points defines “the boundary between a classic bear market rally and a real chart-technical liberation in the form of a new upward impulse”. With today’s price gains, the plus in this trading week is 1.6 percent.
Because the Dax has been consolidating since Tuesday of this week, but this downward movement has so far been minor. Since the former rally high of 13,444 points, the Frankfurt benchmark has only fallen a good three percent. Consolidations of six to seven percent are more common, which would have caused the leading index to drop to 12,600 points.
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US jobs data came in better than expected. 261,000 new jobs were created in October. Only an increase of 200,000 to 220,000 new jobs was expected. For several months, the general motto has actually been that positive US job data is bad for the stock market and vice versa.
But what probably caused prices to continue to rise: the dynamics of wage increases are slowing down. According to capital market expert Thoma Altmann, this is the seventh month in a row that this important number has been declining or at least stagnating.
His conclusion: “Today’s employment report legitimizes the Fed to tighten its monetary policy more slowly. But it is no legitimacy to end the streamlining cycle.”
Because the US job market is overheating. US Federal Reserve Chairman Jerome Powell made it clear on Wednesday this week that the central bank must bring supply and demand back into balance on the labor market. Only then could inflation be brought down from 8.2 percent in September to the target of two percent.
Powell hopes that any slowdown in the labor market could come primarily from a drop in the very high number of job openings, and not just job cuts.
The market was supported by encouraging signals in terms of inflation. Manufacturers’ prices in the euro area are no longer rising quite as rapidly.
Producer prices in industry rose by 41.9 percent in September compared to the same month last year, according to the statistics office Eurostat on Friday. Economists surveyed by the Reuters news agency had expected an increase of 42.0 percent. In August the increase was still 43.4 percent – a record value.
In the statistics, the prices are listed from the factory gate – i.e. before the products are further processed or sold. You can thus give an early indication of the development of consumer prices.
Hong Kong stock market in rally mode
As the week closes, one stock market is in rally mode: that of Hong Kong. The local Hang Seng index rose by six percent. The past trading week with a plus of 10.25 percent was probably the best of the past ten years. Investors are probably counting on a relaxation of the Chinese zero-Covid policy. But as always, everything is relative: Since the beginning of the year, the Hang Seng Index is still down 34 percent despite the great week.
The US technology index Nasdaq 100 has lost 35 percent since the beginning of the year. With yesterday’s daily low of 10,680 points, the year’s low of 10,441 points is back in focus. In the past twelve months, the share price of 22 of the 100 papers has at least halved, including stocks such as Moderna, Adobe and Nvidia. So far, there is no end in sight to the descent.
Look at individual values
Adidas: Among the Dax values, Adidas stood out with an increase of 29 percent to a daily high of 121.26 euros, although the rating agency Moody’s lowered the outlook for the credit rating. The share closed at EUR 114.04, an increase of 21.4 percent.
The reason for the price increase are discussions with the current Puma CEO Björn Gulden. He is soon to succeed the outgoing Kaspar Rorsted. Surprisingly, Gulden lets his contract with the Franconian sporting goods company Puma expire at the end of the year.
When asked about a change to Adidas, he had recently reacted evasively. He didn’t have an offer, he just said. On Friday, after the announcement of his departure from Puma, he was only quoted as saying: “I still have a lot of energy for an operational role for the next five to ten years, but that would have been too long for Puma.” Adidas confirmed shortly afterwards talks about a change.
Vonovia: The real estate giant has achieved a significant profit increase in the first nine months of this year. The Bochum-based group also confirmed its forecast for 2022. However, in view of rising interest rates and capital costs, Vonovia boss Rolf Buch now wants to move away from the expansion course of the past few years, which was supported by acquisitions. Rather, the Bochum-based Dax group wants to part with apartments and get investors on board for individual projects. The stock gained 7.2 percent but has more than halved since the beginning of the year.
Continental: The stock became with an increase of 9.5 percent pulled up by the Italian tire manufacturer Pirelli. This was able to significantly increase sales prices in the third quarter and also benefited from a more advantageous product mix with high-quality tires.
Gea: The plant manufacturer, which produces for the food and beverage industry, has raised its annual targets after growth in the third quarter. The news was well received on the stock exchange: the share was up 7.4 percent.
Krones: The order books at the Bavarian beverage bottling plant manufacturer are full to bursting. At the end of September, the order backlog was almost twice as high as a year earlier. The stock gained 6.4 percent.
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