Dusseldorf Robust economic data surprisingly pushed the Dax down on Thursday. The leading German index was 0.3 percent lower at 15,426 points at midday. In the meantime, the stock market barometer was even more than one percent in the red. On Rose Monday, the Dax went out of trading at 15,478 points.
According to the purchasing manager survey by the financial services provider S&P Global, the German economy has grown again for the first time in six months. With a value of 51.1 points, the purchasing managers’ index for the private sector in February broke the growth threshold of 50 points.
The results of the monthly survey of stock market professionals by the Leibniz Center for European Economic Research (ZEW) also point to an economic recovery. The barometer for assessing the economy over the next six months jumped to 28.1 points in February.
This is the fifth increase in a row. Economists had only expected 22.0 points.
However, the data are not good enough for economic optimism, judges Ulrich Wortberg, market analyst at Helaba. “Overall, the figures suggest weak economic momentum. Nevertheless, the mood indicators will probably not deter the ECB from raising interest rates.” This is causing frustration among investors.
Unchanged trading range
With the current listing, the German stock exchange barometer remains within the narrow trading range of the past few weeks. On the top is the annual high of 15,659 points from February 9th. On the downside, the area between 15,250 and 15,275 points is a resistance. Only when the Dax breaks out of this range of 400 points will there be a lasting change in the direction of the German stock market.
Stock market strategists expect prices to continue to rise. Because in stock market history, a weak year with losses – like 2022 – was always followed by a strong one. However, in these strong years, significant course corrections usually took place before the summer.
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Investors are now trying to anticipate this setback and are risk-averse in the meantime. They don’t want to be caught unawares by falling prices and instead look for profit-taking.
Jochen Stanzl from CMC Markets observes that some investors are also shifting their portfolios in favor of fixed-term deposits. “The share is no longer without alternative, the interest rate is no longer negative. The stock market world has turned 180 degrees on this matter.”
Impulses from the reporting season
In addition, the reporting season continues on Tuesday. Among others, the US retail group Walmart, the US medical technology group Medtronic and the French IT consulting giant Capgemini are opening their books. The major British bank HSBC had already announced before the European stock exchanges opened that they would have increased their profits in 2022.
In the afternoon, further impetus could come from Wall Street. After the holiday-related break on Monday, however, analysts are expecting a weak trading day here as well. Because one day before the minutes of the last interest rate meeting of the US Federal Reserve are published, many are likely to remain in a waiting mood.
The so-called Fed Minutes show the majority with which the decision to increase the key interest rate by 0.25 points at the beginning of February was taken. From this information, investors try to figure out how the Fed’s interest rate policy could turn out. Further interest rate hikes are likely to cause pessimism in the markets.
Look at individual values
Adva Optical Networking: The Bavarian network supplier met its goals in the past year. At 712 million euros, sales in 2022 were within the range of 680 to 730 million euros lowered in the summer, as the company announced on Tuesday. Net profit, on the other hand, collapsed by two-thirds. The Adva share lost 0.1 percent, but supports its parent company, the US telecom supplier Adtran, whose shares in Frankfurt rose by 2.6 percent.
Commerzbank: Even today, the promotion to the Dax 40 moves the stock market price of the financial institution. On February 27, Germany’s second largest private bank will replace industrial gases specialist Linde in the index, which has withdrawn from the Frankfurt Stock Exchange. The papers start the trading day with a plus of two percent, but give up the profits again in the morning.
German Stock Exchange: The analysts of the investment bank Jefferies changed the share from “buy” to “hold” and lowered the price target from 210 to 190 euros. This puts a strain on the stock exchange operator’s shares, which have meanwhile lost more than three percent, and at noon they are down a good one percent.
Rheinmetall: The promise of German politicians to deliver armored personnel carriers to Ukraine means that the armaments company continues to rise in share price. The share listed in the MDax increases by 2.3 percent.
Credit Suisse: After an inquiry from the financial market regulator Finma about outflows of customer money from the institute, the share slipped to a record low. The shares of the crisis-plagued major Swiss bank fell by more than five percent to 2.60 francs. This makes Credit Suisse the biggest loser among both Swiss blue chips and European financial services stocks.
Zalando: The online retailer plans to cut 17,000 jobs in order to cope with the declining consumer appetite. The stock loses 1.5 percent.
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