A market phase characterized by great uncertainty.
(Photo: dpa)
Dusseldorf A look at the news and the Dax development in the past week shows a discrepancy. There were few really positive surprises. Just a lot of reports that weren’t as bad as feared.
The companies’ quarterly figures were not as weak as expected. And the US Federal Reserve’s (Fed) interest rate decision remained in line with forecasts with a step of 0.75 percentage points. Nevertheless, the German leading index Dax rose by 1.7 percent last week, the US index Dow Jones even by 2.8 percent.
Long-term investors, who usually start building up new positions after good news, were probably not responsible for this development. Apparently, sellers who did not part with their shares further because there was no new bad news in the past week were responsible. That alone was enough for a positive stock market development.
A week ago, sentiment expert Stephan Heibel stated that the leading German index was in the first phase of the relief rally. It remains to be seen whether the further development will be sufficient for the stock markets to switch back to a violent rally mode. The participants in the Handelsblatt survey Dax-Sentiment at least have their doubts. This can be seen, for example, from the data from the Stuttgart Stock Exchange. Because there, investors are increasingly protecting themselves against falling prices.
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For the sentiment expert Heibel, on the other hand, it is not the first time “that the bottom of a correction occurs because there are no longer any sellers”.
And it would not be out of character if stock markets continued to stage a gradual recovery from then on, punctuated by breathers as issues such as the Ukraine war, inflation and supply chain disruptions reemerge. However, there could be successive solutions to these negative developments. Then the stock markets should be significantly higher than today.
According to Heibel, however, the difference between Germany and the USA remains. While in the Federal Republic of Germany a cold winter is looming as a result of the lack of gas and industries may have to limit their production, in the USA the joy about the already subdued inflation dominates.
The Ukraine war is far away for the Americans, supply chain problems are resolving there. And energy shortages are not known in the USA. “On the contrary, there is still too much gas there because the largest gas terminal still has to be repaired after an incident in June,” says the sentiment expert.
The gas, which cannot be liquefied, now has to be consumed on the domestic market at dumping prices.
Dax sentiment survey data in detail
Investors are reassured less by the reports than by the development of the stock market. Sentiment on shares turned positive for the first time since the beginning of the year. The value is plus 0.1. The mood is now neutral again for the first time.
Uncertainty is also disappearing, although with a value of minus 1.0 it has not yet completely disappeared. The volatile market events in the past few months have left too deep a mark for one to be able to present oneself complacently after two positive weeks on the stock market.
The expectation of the Dax development in three months remains moderately positive with a value of plus 0.7. The bulls are dominating, but that’s not real optimism. The willingness to invest has jumped to plus 2.9 – so investors see further opportunities for the coming weeks.
The Euwax sentiment of the Stuttgart Stock Exchange, where private investors trade, has fallen further and is now trading at a value of minus 6.5. Significantly more put leverage products are again being bought as protection against falling prices than call derivatives on the Dax. This is a sign that private investors do not really trust the price increase. There is no conviction that the German stock market has already bottomed out.
On the other hand, the put/call ratio on the Frankfurt derivatives exchange Eurex, where institutional investors trade, shows a rather neutral positioning at 1.4.
In the US, the put/call ratio on the Chicago futures exchange CBOE falls to 0.95. US professionals are increasingly relying on further rising courses. While the fear of energy problems in the coming winter continues to weigh on the mood in Germany, the United States seems to be slowly accepting the war in Ukraine as a given.
US fund investors slightly increased their investment ratio by two percentage points to 47 percent. This means that the rate remains low, because a level of 70 percent or more is considered normal.
The bull/bear ratio for US retail investors has risen to minus twelve, remaining pessimistic. The increase in sentiment is solely due to the declining number of bears. The neutral camp has grown by four percentage points to 32 percent.
The “fear and greed indicator” of the US markets, calculated using technical market data, shows only very little fear at a value of 42 percent. Other short-term technical indicators are signaling that a breather is more likely in the short-term.
There are two assumptions behind surveys such as the Dax sentiment with more than 7,000 participants: If many investors are optimistic, they have already invested. Then only a few are left who could still buy and thus drive prices up. Conversely, if investors are pessimistic, the majority of them have not invested. Then only a few can sell and thus depress the courses.
Do you want to take part in the survey? Then let yourself be automatically informed about the start of the sentiment survey and register for the Dax sentiment newsletter. The survey starts every Friday morning and ends on Sunday afternoon.
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