Market report: DAX remains at previous day’s level

Market report: DAX remains at previous day's level

market report

The leading index left the daily lows below the mark of 15,700 points behind at least by midday. With currently 15,765 points, the DAX is almost at its XETRA closing level yesterday, the day before the index had lost almost one percent to 15,767 points.

However, the mixed situation for the stock markets remains difficult. After clear losses yesterday evening, the stock exchanges in New York could at least hold their ground today. Currently, US futures are suggesting that the Dow Jones index could retake the 35,000 mark. Yesterday, the index of US standard values ​​as well as the technology exchange Nasdaq recorded significant losses. There were also clear losses in Asia in the morning.

The series of bad data from the second largest economy simply does not end, judged Konstatin Oldenburger, market analyst from the brokerage house CMC Markets. “Investors worry that the situation in China will spill over to Europe and the US.” Weak economic data from the world’s second-largest economy yesterday prompted the Chinese central bank to cut interest rates for the second time since June.

In contrast, the economy in the USA continues to boom. However, this raises new concerns that US interest rates will remain high. In the afternoon, a series of US economic signals are expected, such as data on industrial production and the real estate market. In the evening, investors are waiting for the minutes of the last meeting of the US Federal Reserve (Fed). Investors are hoping for further indications of an interest rate pause at the next meeting in September.

On the foreign exchange market, the prospect of higher interest rates in the USA for a longer period of time is making the dollar relatively stronger. The euro was trading at $1.0925 at midday. The weak economic data from China are having an impact on the commodity market. A barrel of North Sea Brent is currently quoted at $84.30, around half a percent below yesterday’s level. China, the world’s second largest economy, is an important oil importer.

The economy in the euro zone grew slightly in spring for the first time since summer 2022. From April to June, gross domestic product (GDP) increased by 0.3 percent compared to the previous quarter. In addition, industrial companies in the euro zone surprisingly increased their production in June. The increase in manufacturing was based on an increase in energy production, which increased by 0.5 percent. On the other hand, the production of capital and intermediate goods as well as consumer goods and durable goods fell month-on-month.

Inflation in the UK fell to 6.8 percent in July from 7.9 percent in June, the ONS said. The Bank of England (BoE) and the economists surveyed by the Reuters news agency had expected this. However, the so-called core inflation is proving to be persistent – i.e. without the volatile prices for energy, food and tobacco. This rate, which is important for monetary authorities, was 6.9 percent in July, just as high as in June.

Shares in the sporting goods group Adidas and the consumer goods manufacturer Henkel recorded the largest gains in the index. Adidas benefited from a buy recommendation from the analysts at Bank of America. On the other hand, private bank Berenberg downgraded Bayer shares from “buy” to “hold” and lowered the price target from 66 to 60 euros. Analyst Sebastian Bray now sees Bayer’s business cycle pointing downwards. The group should have problems increasing earnings in the next two years.

Papers from the online fashion retailer Zalando are also losing. Dealers refer to a report in the daily newspaper “Welt”, according to which the Chinese cheap portals Shein and Temu want to offer their articles more on the German market in the near future. The platform plans of the Chinese threatened to become dangerous for German online trade, it says there.

The papers of Deutsche Bank and Commerzbank each lose about half a percent. In the USA, the prospect of a possible downgrading of the credit ratings of some major US banks by the rating agency Fitch weighed on the evening. Shares in JP Morgan, Bank of America, Citigroup, Goldman Sachs and Wells Fargo fell significantly.

Despite losses on the balance sheet, the shares of Grand City Properties rose slightly. The operating result of the real estate group fell by three percent to 94 million euros compared to the same period last year. The bottom line is that the real estate group made a loss of almost 402 million euros due to a lower revaluation of the real estate portfolio. However, the company is more confident about the operating result in the current year. Company boss Refael Zamir is now aiming for a range of 175 to 185 million euros in 2023.

The share of the SDAX company Dermapharm gains six percent. Thanks to an acquisition in France, the drug manufacturer increased its sales by 24 percent to 582 million euros in the first six months, although sales of the vaccines produced for BioNTech collapsed. The adjusted operating result (Ebitda) grew by 13 percent to 168 million euros.

The US bank JPMorgan has downgraded Telefonica Deutschland from “Overweight” to “Neutral” and lowered the target price from EUR 3.60 to EUR 2.20. The roaming partnerships in the German mobile market would have potentially damaging consequences for the pricing power in the sector, according to analyst Akhil Dattani in an industry study. For Telefonica Germany, which is losing 1&1 as a roaming partner to Vodafone, the by far largest drop in sales went hand in hand.

The Vietnamese carmaker Vinfast is worth more than the US companies General Motors and Ford after its US stock market debut. The price increase to a good 37 dollars yesterday meant a market value of around 85 billion dollars. Ford is currently worth almost $48 billion, General Motors a good $46 billion. However, only a relatively small number of Vinfast shares are traded, so there can be large price movements quickly.

The Norwegian sovereign wealth fund has again made a billion-dollar profit in the first half of the year. The plus added up to the equivalent of around 130 billion euros, as announced by the world’s largest sovereign wealth fund. Strong equity markets and a weak national currency supported the fund. In the first six months of 2022, the fund posted a record loss of around 170 billion euros due to the weakening stock markets as a result of fears of war, inflation and recession. Established in 1996, the sovereign wealth fund invests the income from the Norwegian oil and gas sector.


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