Dusseldorf The German stock market continued its recent negative trend at the start of the week. The leading index Dax closed 0.5 percent down at 14,307 points. Since the interim high of 14,585 points on December 2nd, the minus has totaled around two percent.
The Dax is thus still looking for a direction after rising by around 2400 points in October and November. This is also reflected in the below-average trading volume. This was just under 51 million Dax shares last week – during the previous rally the value was 68 million. So buyers hold back.
The creeping decline is also a sign that investors are waiting ahead of this week’s big events. “Today’s trading day is something like the calm before the big storm,” commented asset manager Thomas Altmann from QC Partners on the market movement.
The US inflation rate for November will start on Tuesday. This is followed by interest rate decisions by the US Federal Reserve (Wednesday), the European Central Bank (ECB) and the Bank of England (each on Thursday).
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“This week provides a first preliminary decision on how far interest rates will rise and how steep the path to get there will be,” says Altmann. “In view of the flood of events in the coming days, the motto is: just don’t position yourself on the wrong side. Especially not so close to the end of the year.”
Financial markets are expecting the Fed to raise interest rates by 0.5 percentage point on Wednesday, after four consecutive jumbo rate hikes of 0.75 percent. Many experts believe that the ECB will also switch to a less aggressive stance at its interest rate meeting on Thursday and raise key interest rates by just 0.5 percentage points.
According to analysts, however, references to the future monetary policy of the central banks are even more important than the actual interest rate decision. “People want to hear from the Federal Reserve that the cycle of interest rate hikes is coming to an end and maybe after a small hike or two it might peak in March,” said Juergen Molnar, capital markets strategist at trading house RoboMarkets.
Bitcoin: price at $ 17,000
The oldest and most important cryptocurrency is struggling with the psychological mark of $17,000 at the beginning of the third to last trading week of 2022. A Bitcoin unit recently cost around $17,014, which corresponds to a slight minus compared to the previous day.
“Respect for the release of important economic data and the US Federal Reserve meeting is obviously too great,” commented crypto analyst Timo Emden. “No one wants to be caught on the wrong foot.”
Look at individual values
Beiersdorf: With RBC and Morgan Stanley, two analysts are giving up their pessimism for the consumer goods and adhesives group. The Morgan Stanley analyst Rashad Kawan argued that the relationship between opportunities and risks is now balanced and therefore better than that of the competitor Henkel, which was further rated negatively. Beiersdorf shares gained 1.4 percent in the Dax.
German Stock Exchange: The exchange operator’s papers lost 2.2 percent after a downgrade by the US bank JP Morgan.
FMC: The Fresenius shares, which lost 2.1 percent, were negatively influenced by a canceled Warburg buy recommendation. He still sees a burden in the dialysis subsidiary Fresenius Medical Care (FMC). An investment is still subject to considerable uncertainties.
Symrise: The Dax group benefited from a merger in the industry with an increase of 1.1 percent. The Danish enzyme manufacturers Novozymes and Chr.Hansen are planning a multi-billion merger. Together, the two companies have annual sales of around 3.5 billion euros and can achieve annual sales synergies of over 200 million euros, as both sides announced on Monday.
Rheinmetall: In the MDax, Rheinmetall has been making a name for itself with a high since the beginning of July. The 1.2 percent higher papers of the automotive supplier and armaments group benefited from a large order for exhaust gas recirculation modules.
Team viewer: Teamviewer is downgraded. The shares of the specialist for remote maintenance software fell by 2.8 percent in the MDax small-cap index. Morgan Stanley experts downgrade the shares to underweight from equal weight. However, they raise the price target from eleven to twelve euros.
ProSiebenSat.1: Shares in the media group lost three percent in the MDax after JP Morgan gave up its previously optimistic attitude towards the media group.
Va-Q-Tec: In the second-tier segment, Va-Q-Tec jumped 40.2 percent. Shortly after the stock market closed on Friday, it was announced here that a merger agreement with the financial investor EQT was in the offing.
With material from dpa and Reuters.
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