Dusseldorf After three trading days, the German stock market is calm with significant price gains. The Dax was down 0.4 percent in the afternoon at 14,434 points.
Job data from the USA proved to be a burden. The bottom line was that 235,000 jobs were created in December, as the personnel service provider ADP announced on its company survey on Thursday. Experts polled by the Reuters news agency had only expected job growth in the private sector of 150,000.
On Friday, the US government will release its jobs report, which will also include public sector jobs. Economists are expecting continued solid nonfarm payrolls growth of 200k in December, after an increase of 263k in November.
In the first three trading days of the 2023 stock market year, the leading German index climbed 570 points and ended trading on Wednesday at 14,491 points, an increase of 2.2 percent and more than 300 points.
But this Thursday it should be quieter. Such high profits paired with an extremely high trading volume lead to the conclusion: Both the interest in buying and the buying pressure not to miss a rally are likely to subside for the time being.
Compared to the start of the year and also to the last trading week of the old stock exchange year, the turnover in the 40 Dax titles on Wednesday was more than twice as high with 76 million traded shares. For the capital market expert Thomas Altmann from the investment house QC Partners, one thing is certain: “Those who followed the market and finally had to buy did so yesterday.”
Despite all the joy about the high price gains since the beginning of the year: The Dax has remained in its consolidation phase since mid-December. From a purely formal point of view, the leading index would only switch back to the medium-term rally mode if the historical high of the upward movement of 14,675 points was overcome. So far, the setback since mid-December has been around six percent and is thus a confirmation of the medium-term rally since the end of September, when the Dax slipped to 11,862 points.
Professionals are “mentally fully booked” for 2022
There is a good chance that the Dax will rise towards 15,000 points in the coming days and weeks. Because according to the current survey by the Frankfurt Stock Exchange, the medium-term oriented investment professionals have no positions that stand in the way of a further rally. The mood among institutional investors has deteriorated, the sentiment index of the Frankfurt Stock Exchange has fallen significantly. That means: Many professionals have separated from their commitments and are now waiting.
However, the explanation for the behavior is probably not related to a pessimistic attitude, but rather lies at the turn of the year. The new stock market year regularly sees a new start for the professionals. According to former currency trader Joachim Goldberg, Germany’s leading sentiment expert, the profits and losses accumulated up to that point will be “mentally booked out”.
The number 13,923, the closing price of the past stock market year, is now decisive for the professionals. This score is the benchmark for many asset managers who invest in the German stock market, since the return on their investment vehicles must be able to be measured against the Dax performance.
Private investors are not under this pressure, most of whom have bet on rising prices in the past few trading days. This is remarkable for Goldberg because there were hardly any really cheap entry opportunities for stock purchases in the trading days. “Has the mild weather contributed to a reassessment of the energy situation in this country and the resulting consequences for growth and inflation?” asks the behavioral economist.
The Dax sets the pace – that entails risks
The medium-term rally on the German stock market is unusual because the Dax has set the pace for the leading US stock exchanges. Usually it’s the other way around.
In the five weeks since the beginning of December, the leading German index has outperformed the US technology index Nasdaq 100 by 19 percent. The broader S&P 500 remains an outperformance of six percent. In Altmann’s opinion, this development could become a burden. “Because it’s quite possible that some will use these performance differences to switch into US equities,” he explains.
The rally in China and Hong Kong continues. The better-than-expected Caixin Services PMI is attracting more buyers. The stock markets in Hong Kong, Shanghai and Shenzhen are now believing that last year’s sell-off was overdone. The increasing opening of the Chinese economy is attracting investors back into this market.
Look at the individual values
synlab: The share of Europe’s largest laboratory operator fell in the SDax by up to 6.3 percent to 10.95 euros and thus to a new record low. The background is an investigation by the Portuguese antitrust authorities against several medical diagnostics providers, including Synlab. The drop in prices was probably exaggerated because only one country was affected, said a trader.
Per Seven Sat1: The media group’s papers were downgraded from “neutral” to “underperform” by Bank of America and the price target was capped from EUR 9.00 to EUR 7.10. The share lost 2.3 percent at the end of the MDax.
Südzucker: In the small caps index, they are among the favorites with a plus of 4.0 percent to 17.26 euros. Analyst Alexander Neuberger from Bankhaus Metzler wrote that the prospects on the European sugar market had improved significantly.
Lufthansa: In the MDax, Lufthansa shares gained 1.0 percent. They were buoyed by positive industry sentiment after low-cost carrier Ryanair raised its fiscal year targets. The German airline itself had raised its profit target as early as mid-December due to high demand for flights, and this again and again.
Morphosys: Investors throw Morphosys shares out of their portfolios after an outlook for the blood cancer drug Monjuvi. The papers of the biotech company fall by up to 6.2 percent to 13.14 euros. For 2023, the bottom line is that product sales for the drug in the USA can be expected to be between 80 and 95 million dollars, the company said. Last year, Monjuvi’s US revenue was $89.4 million. Morphosys stock has lost around 85 percent of its value over the past two years.
Hugo Boss: The stock went up 1.8 percent. In addition to strong sales figures for the Next Group from Great Britain at Christmas time, the market also referred to share purchases by CEO Daniel Grieder in the amount of just over one million euros.
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