Dusseldorf After yesterday’s sell-off, the focus on the German stock market is on the 16,000 point mark. In the afternoon, the Dax was trading at 15,920 points, down 0.8 percent. The daily low at 15,897 points shows that the short-term slide on Thursday was not a slip. The Dax fell to 15,988 points on Thursday in the course of the opening on Wall Street, but ended the trading day at 16,052 points, a minus of 1.4 percent.
The Dax has therefore fallen by around two percent from the record high: so far, a rather small consolidation, only the dynamism surprised. With a high trading volume of 75 million papers and a maximum minus of almost 300 points, there was a real sell-off yesterday.
The weak US job data let the Dax slide back into the red more clearly. Only 199,000 jobs were created. The forecasts of the US economists, however, were according to a survey by the business news service Bloomberg at 433,000 new jobs.
Such a reaction was not to be expected, because currently the rule actually applies: Bad job data is good for the stock market and vice versa. Because the US Federal Reserve is currently weighing its announced rate hikes according to the situation on the labor market. She could postpone interest rate hikes to a later point in time if jobs aren’t going smoothly.
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But at the same time the unemployment rate fell from 4.2 percent and the average hourly wage rose by 4.7 percent compared to the previous year. Experts had expected a higher rate and a weaker rise in wages.
According to the analysts at Landesbank Helaba, the US labor market is continuing its recovery based on the data, even though the consensus estimate for job creation was again disappointed. “Against the background of the lower unemployment rate and the strong wage increases, however, the Fed should see the decided, faster pace in reducing bond purchases confirmed,” say the experts.
However, there are currently many reasons against further high price losses. One of the most important is seasonality: at the beginning of January each year, professionals have to invest fresh investor money. In addition, given the European zero interest rate policy, there is currently still no alternative.
Even in the disastrous stock market year 2018, when the Dax slipped by more than 18 percent, the index rose by more than five percent in the first three weeks. This seasonal behavior also includes significant price setbacks at the end of January, when all new funds have been invested. In 2018 there was a significant correction from the end of January to March, with a minus of 15 percent. Last year, too, the Dax fell at the end of January – but only by six percent.
The seasonality factor is supported by the Frankfurt Stock Exchange survey of medium-term oriented private and institutional investors. According to the survey, investment professionals are waiting for the chance to return to work cheaply. Presumably some of them bought yesterday Thursday, another part should invest at the latest at prices of 15,800 / 15,850 positions.
This area is considered to be solid support for the leading German index, which will probably hold – if there is no extremely bad news.
The fear of rapidly rising interest rates in the USA has subsided somewhat after the publication of the central bank minutes. At least the various asset classes no longer show any major fluctuations. The gold price remains at $ 1,790 a troy ounce (31.1 grams) after its price slide the previous day. Bond yields are also no longer climbing any further. The value for a ten-year federal bond is minus 0.063 percent, that of the US government bond with the same term is 1.7266 percent.
After yesterday, Thursday, this federal bond was at its highest level since May 2019 with a value of minus 0.031 percent and thus shortly before a turnaround towards positive interest rates. The yield on ten-year US government bonds was now 1.751 percent.
Bitcoin price continues to slide
Only for the crypto currencies is it still going downhill at the end of the week: The largest and oldest cyber currency lost up to five percent to 40,959 dollars, marking the lowest level in more than three months.
Ether also falls at its peak by almost nine percent to a three-month low of $ 3,129. Since the beginning of the year, Bitcoin and Ether have already been down around ten and 14 percent, respectively. “Bitcoin slept its way into 2022,” comments Craig Erlam from brokerage house Oanda.
An interesting aspect of Bitcoin is the connection with Kazakhstan, where the internet has been switched off. The country is one of the most important locations for mining bitcoins. This is the name given to those complex calculations with which new units of the cryptocurrency are generated with high energy consumption.
This process, also known as crypto mining, has now declined sharply in Kazakhstan. A specialist from the American analysis and news platform “The Block” dared to make a rough quantification on Wednesday on Twitter: The so-called hashrate has decreased by around twelve percent worldwide. That means: The computing power of all Bitcoin miners around the globe has collapsed by more than a tenth due to the failures in Kazakhstan.
Extreme industry rotation
Despite a Dax decline of just two percent since the beginning of the year, a lot has changed in terms of the individual values during this period. The performance of the respective stocks also shows how far the industry rotation has progressed towards cyclical values and away from the so-called corona winner papers.
A plus of around ten percent for the Daimler, Deutsche Bank and Porsche stocks are offset by similarly high losses at the pharmaceutical and laboratory supplier Sartorius and the cooker box mail order company Hellofresh. The stock of the grocery delivery service Delivery Hero even fell by more than 13 percent.
Look at the individual values
Lanxess: After an upgrade, the stock will rise by 2.6 percent. The Barclays Bank has raised the securities to “overweight” from “equal weight” and raised the price target to 70 (60) euros.
Deutsche Bank: The papers of the money house rise by 0.8 percent. According to a “Handelsblatt report”, the financial institution sees itself on course for its central return target for this year.
Infineon: The semiconductor company is benefiting from the good mood in the industry after the profit jump at Samsung. The shares of the South Korean electronics company gained around two percent, while the shares of Infineon rose 2.9 percent.
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