Dusseldorf The German stock market loses focus over the 13,000 point mark. After initial gains, the leading index is down 0.6 percent at 12,850 points at midday. Yesterday’s high for the day was 13,020 points, but the stock market barometer then immediately slipped back below this round mark. At the end of trading there were 12,931 points on the display board.
Since the low for the year at the end of September, the Dax has gained almost 1150 points. Further price gains in the next one to two weeks are quite possible, but this upward movement should end at the latest in the range of 13,500 to 13,600 points.
This is also supported, for example, by the duration of the ongoing bear market rally, which can last up to six weeks. This has also been shown, for example, by the previous bear market rallies this stock market year.
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Seasonal factors also signal such a development: in many stock market years, such an autumn rally ended by the beginning of November at the latest. The fact that the ground was laid for a subsequent year-end rally after these price losses is of secondary importance.
The biggest problems can be seen in the bond market, where yields are climbing unabated. In return, bond prices have fallen drastically. In the opinion of the stock market expert Anton Riedl, “the dramatic devaluation of securities that were previously considered safe is now leading to far-reaching upheavals on the financial markets: from the downward waves in real estate and the difficulties in British pension funds to the shrinking capitalization of large insurance companies”.
An end to the disaster on the bond market is not yet in sight. On the contrary: With the recent rise above the 4.0 percent mark, the groundbreaking yields on the US bond market are continuing their dynamic climb. With 4.27 percent, which was reached on Monday, the yields are now back to the level they were 15 years ago. A further increase to 4.5 to 5.1 percent is quite possible; The last time there was longer consolidation in this area was in the years 2005 to 2007.
It is hard to imagine that the Dax will change from the current bear market rally to a sustainable trend reversal without the bond market calming down. For a sustainable trend reversal on the German stock market, the leading index must above all overcome the 200-day moving average, which is currently at 13,742 points with a downward trend.
However, should there be any signals from the US Federal Reserve that it is slowing down further interest rate hikes, a sustainable trend reversal is in sight. While the scenario is not very likely, it again harbors great potential for surprises for a sudden rally.
For Jörg Scherer, technical analyst at HSBC Germany, the long-term fate of the German standard stocks should already be decided just below 13,400 points. The key support is at 12,400 points. If the Dax falls below this mark, a slip towards the low for the year of 11,863 points is likely.
SAP stock gains despite weak numbers
The thesis that further price gains are possible in the next two weeks also underscores the reaction to the quarterly figures for the SAP share.
Europe’s largest software house cannot convert rising sales into higher profits and failed to meet market expectations with its figures for the third quarter. However, the share can increase by four percent to EUR 95.00. Apparently, the price losses in the past few weeks were too great for bargain hunters to get back in.
At the end of September, the paper fell to a new five-year low of EUR 79.85. The long-term price picture for the Dax heavyweight is rather explosive. The share is still trading below the important support zone of around EUR 95, which was not fallen below even during the corona crash in mid-March 2020. If the share does not recover again soon and sustainably to over 95 euros, the entire upward trend of the past 20 years at SAP threatens to tip over.
Look at other individual values
Covestro: High raw material and energy costs caused the plastics group to slump in profits in the third quarter and also make the board less confident for the year as a whole: “The situation is like we’ve never seen before, with an energy crisis in Europe,” said CFO Thomas Toepfer .
In the summer, Covestro had to scale back its targets for 2022 for the second time this year due to the drastically increased costs. The forecast range, which has now been shortened at the top, was badly received on the stock exchange. The stock is down 6.3 percent. “The new warning was an open secret,” commented traders.
HSBC: A slump in profits scares investors away. Bank shares fall 7.4 percent in London. Increasing risk provisions and charges from the sale of the French business caused pre-tax profit to fall by 42 percent in the third quarter.
Linden: The announced withdrawal from the Frankfurt Stock Exchange is affecting the paper. The shares of the industrial gases group give way to 6.7 percent and are Dax tail light. The group had announced the previous evening that it only wanted to trade the shares in New York.
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