Market Report
DAX started the new stock market week with an upward trend, but the market situation remains fragile, especially since the September statistics do not bode well.
Anyone hoping for further gains in the German stock market after a strong start this week is likely to be disappointed. Broker IG currently values the DAX at 18,421 points, down 0.1%. Earlier this week, the German stock market index rose 0.8% to 18,444 points, but this was only a fraction of the recent price decline.
From a technical chart perspective, DAX is holding its all-time high after a significant price drop and false breakout last week. However, the 50-day moving average, which is currently above 18,300 points, a key indicator of the long-term trend, has been able to withstand the onslaught of the bears. Meanwhile, caution continues to be required as seasonal factors significantly increase the possibility of a statistical price drop in September.
Fundamentally, investors remain concerned about the U.S. economic outlook. After last Friday’s U.S. labor market report, the market’s fears of a recession have been rising again.
Accordingly, there is also great uncertainty about the size of the Fed’s rate cut next week. According to the CME Group’s Fed Watch Tool, 71% of market participants currently expect a 25bp rate hike. At least 29% expect a significant rate hike of 0.5%.
Positive guidance for DAX trading comes from Wall Street. The Dow Jones Industrial Average closed yesterday up 1.2% at 40,829 points. The tech-heavy Nasdaq rose 1.2% to 16,884 points. The S&P 500 Index rose 1.2% to 5,471 points.
“A correction or profit-taking tends to be followed by a stronger market, and I think that’s what we’re seeing today,” said Tim Ghriskey, chief portfolio strategist at Ingalls & Snyder.
But Wall Street’s positive guidance was largely overshadowed by Asian markets this morning. The Nikkei, which includes 225 stocks, was up 0.1% just before the Tokyo Stock Exchange closed. The Shanghai Stock Exchange is currently down 0.5%.
In Asian forex trading, the euro could rise slightly to $1.1041. Gold prices are slightly lower but could defend the $2,500 level. A troy ounce of the yellow metal is currently below $2,502.
In commodities markets, oil prices are stable as investors weigh the potential for further cuts due to supply disruptions caused by Tropical Storm Francine and continued weak Chinese demand. The North Sea Brent variety is flat at $71.89 per barrel (159 litres).
VW is still a hot topic in the DAX. According to Wendelin Wiedeking, former Porsche boss and Volkswagen supervisory board member, the Volkswagen Group cannot avoid drastic cuts. “Volkswagen would do well to get horse therapy in Germany,” Wiedeking told Bild newspaper. “There were always too many people on board.”
It’s worth looking at SAP stock today. U.S. rival Oracle’s quarterly results beat market expectations, driven by continued rapid cloud growth. Oracle CEO Safra Catz said, “We are seeing accelerated growth in operating income and net income as our cloud business becomes our largest business.” This trend is likely to continue in the coming quarters.
Apple is using better cameras and artificial intelligence (AI) in its new iPhones. But European users won’t be able to experience many of the new AI features for the time being. The company is holding them back due to legal uncertainty over the new EU digital law DMA. Apple could also shake up the hearing aid market with new software for its AirPods earbuds.
