Dusseldorf The leading German index has reached a new high for the year at 15,827 points. After the US inflation data was released, the stock market barometer rose by 150 points. The upward movement towards the 16,000 mark continues – the record high is still 16,290 points.
Because inflation in the USA eased significantly in March. The inflation rate for goods and services fell to 5.0 percent from 6.0 percent in February. Experts surveyed by the Reuters news agency had expected 5.2 percent.
The US Federal Reserve can celebrate the abating of the wave of inflation after a series of interest rate hikes as a stage victory. But it is struggling with stubbornly high core inflation, which excludes volatile energy and food prices. This rose to 5.6 percent in March from 5.5 percent in February.
However, this development is seen as a warning sign, since the upward trend in prices has evidently already spread to large areas of the economy and threatens to become entrenched. The US monetary authorities headed by Fed Chairman Jerome Powell must now decide whether to raise interest rates further at the beginning of May or whether to take a break out of consideration for the economy and possible recession risks.
The new inflation data has solidified the view of investment professionals. 75 percent of market participants now expect the Fed to hike rates by 25 basis points at its next meeting in early May. A week ago, according to the Chicago Stock Exchange’s Fed Watch Tool, less than half of the players believed it. By September at the latest, the pros are again counting on interest rate cuts by the US Federal Reserve.
At first glance, Tuesday was a rather dull trading day with a range of only 101 points. Jörg Scherer, technical analyst at HSBC Germany, has nevertheless found something remarkable: On the basis of the daily closing price, the Dax reached a new 52-week high. In the weeks before, there had already been such highs on a weekly close basis and during intraday trading.
“The boom mode was thus underpinned again,” analyzes Scherer.
Similar signals can currently be derived from chart technology and investor sentiment. In summary, these mean: The overarching upward trend is intact again after the price slide in mid-March and promises further rising prices. Profit-taking could occur in the short-term, but the decline is likely to be moderate.
Both Martin Utschneider, technical analyst at the private bank Donner & Reuschel, and sentiment expert Stephan Heibel came to this conclusion after evaluating the Dax-Sentiment survey of the Handelsblatt.
Uptrend is intact again
“The overarching upward trend is clearly intact again,” says Utschneider. “The market technical indicators also testify to a sustained trend strength.” The area from 15,300 to 15,400 points serves as the first major support.
Dax starts positive after Easter
There, with 15,348 points, is the 38-day line, which shows the short-term trend. A slide below 15,300 points could trigger a test of the 15,000 zone, below which is the low of the past two weeks at 14,809 points.
In the Handelsblatt survey Dax-Sentiment, investors’ pessimism about the future has reached its highest level in more than three years. Most now expect falling prices for the leading German index Dax in the next three months.
>> Read here: Most investors expect falling prices in the next three months
“This investor behavior signals an imminent consolidation, supported by other technical indicators,” explains sentiment expert Heibel. But he does not expect a longer and significant slide in prices, and accordingly no end to the current bull market.
Look at the individual values
Mercedes-Benz: The carmaker slightly increased sales in the first quarter despite the continued disruption in supply chains and the weak economy. This gives the stock a plus of 0.4 percent. From January to March, the Dax group delivered 503,500 cars to dealers and private customers, an increase of three percent compared to the same period last year.
“The demand from our customers for top-end and battery-electric vehicles is the driving force behind our sales results in the first quarter,” said Head of Sales Britta Seeger on Wednesday. Accordingly, top-of-the-range models such as the G-Class and Maybach were particularly in demand, but also entry-level models from the brand with the star such as the GLA and GLB and their battery-powered counterparts. The share of pure e-cars in total sales has risen to ten percent from six percent a year ago.
Real estate values: A media report inspires the prices of the industry. Vonovia, Aroundtown, TAG Immobilien and Grand City Properties shares gained between 1.9 and 3.2 percent. According to the Bloomberg news agency, prices for new apartments in Berlin rose by 0.8 percent in the past quarter after six months of declines.
Daimler trucks: A record profit at the Swedish truck manufacturer Volvo boosted the entire industry. Volvo shares rose 8.2 percent to 210.35 crowns. Rivals such as Traton and Daimler Truck attracted almost six and a good three percent respectively. Volvo defied delivery bottlenecks and inflation at the start of the year and exceeded market expectations with a record profit.
Merck: The papers fell by six percent to a five-month low of 162.85 euros. The Darmstadt-based pharmaceutical and technology group has to accept a setback in the crucial clinical study with its multiple sclerosis drug evobrutinib.
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