US job market report drives the Dax

If the Dax were to climb above the 14,500 point mark at the end of the day, that would be another sign of strength after gaining a total of 3.7 percent on the first four trading days of the year. Because this mark was an important resistance recently, explains HSBC analyst Jörg Scherer.

In the best case, the index would even rise above the December high of 14,675 points, explains portfolio manager Thomas Altmann from asset manager QC Partners: “In net terms, the Dax has run sideways at a high level for the past eight weeks. A break above the December high would be the longed-for breakout to the upside.”

Until the afternoon, the Dax was in the red on Friday, but turned positive with the US job market report. The data turned out better than expected, in December 23,000 more new jobs were created than forecast.

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A strong labor market is usually a sign of high inflationary pressures. The US Federal Reserve is currently trying to combat this with interest rate hikes. So basically, a robust labor market is a sign that the Fed needs to raise interest rates further to bring inflation down. This is a burden for the stock market.

However, the labor market report did not only have bad news, as Altmann notes: “The number of newly created jobs is as low as it was last in December 2020. The labor market is still growing, but it is growing much more slowly. At the same time, the unemployment rate remains near its 70-year low. That’s exactly what the Fed wants to see.”

The judgment of Ulrich Wortberg from Helaba is similar: “The figures are robust, but since wage pressure seems to be easing, interest rate expectations are unlikely to be pushed.” This ensured that the stock exchanges initially reacted positively to the labor market data.

In the morning there had already been positive news regarding price developments in the euro zone: the inflation rate fell more than expected to 9.2 percent in December. The fact that the Dax did not react clearly to this is possibly a sign that declining inflation rates have now been priced in.

Alexander Krüger, chief economist at the private bank Hauck Aufhäuser, also pointed out: “The inflation rate is falling, but the fight against inflation is not yet won. Due to the lack of state aid, a countermovement is already threatening in January.” Lower price pressure could mean that the European Central Bank will raise the key interest rate less sharply in the future.

Stock market expert Koch: “A rally on Wall Street is not in the interest of the US Federal Reserve”

The economic figures from Germany on Friday also made clear the risk of recession that is hanging over the German economy and the stock exchanges: In November, German industry suffered the sharpest drop in orders in more than a year due to falling foreign demand. The orders were 5.3 percent lower than in the previous month, as the Federal Statistical Office announced on Friday. A drop of 0.5 percent was expected.

countermovement in oil

Oil prices are rising slightly after the significant declines of the past few days. A barrel (159 liters) of North Sea Brent costs around 79 dollars – an increase of 0.7 percent on the previous day. The price for a barrel of the American West Texas Intermediate (WTI) variety rose by 0.6 percent to a good 74 dollars.

Crude oil from the North Sea has become cheaper by more than seven percent since the beginning of the year. Among other things, weak economic data from China weighed on oil prices as they fueled concerns about weaker demand in the world’s second largest economy.

Market observers also referred to the recent development of oil reserves in the USA. This slowed down the rise in oil prices before the weekend. U.S. oil reserves rose 1.7 million barrels to 420.6 million barrels last week, according to US government data from the previous day. Higher inventories of crude oil in the world’s largest economy usually weigh on oil prices.

The hope of an economic recovery after the latest corona wave in China is also giving commodity prices a boost. Industrial metals such as copper, tin and aluminum gain between 0.6 and 1.8 percent. The Chinese government has announced measures to support the airline and real estate industries.

Look at the individual values

Fresenius: In the overall uncertain environment, defensive stocks that are less affected by economic fluctuations are in demand. Fresenius rises by 1.8 percent in the Dax. The major Swiss bank UBS had raised the target price by two euros to EUR 32.50 and reiterated its buy recommendation. The papers of the dialysis subsidiary FMC rose by 0.8 percent.

Mercedes-Benz: The carmaker was initially one of the losers, the papers are down 0.7 percent. Mercedes-Benz wants to boost sales of electric cars with its own charging station network. By the end of the decade, more than 10,000 fast charging stations are expected to be installed in North America, Europe, China and other key markets. Mercedes-Benz calculates a low single-digit billion amount for the worldwide network.

Rheinmetall: In terms of individual values, Rheinmetall is one of the favorites in the MDax with a plus of 2.7 percent. The share benefits from the German government’s decision to deliver several dozen “Marder” tanks from the Düsseldorf-based armaments group to the Ukraine.

Morphosys: A downgrade pushes the shares of the biotechnology company in the SDax around one percent into the red towards 13 euros. The experts at the US investment bank Morgan Stanley have downgraded the title to “underweight” from the previous “equal weight” and lowered the price target to 12.50 from 17 euros. The reason they gave was the Bavarian company’s pessimistic annual forecast for its important blood cancer drug Monjuvi.

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