Market Report: DAX is on the verge of another record high

Ahead of the US Federal Reserve (Fed) meeting, more and more investors are counting on major interest rate moves. They still don’t want to take big risks in the stock market. DAX rose at noon.

Investors in the stock market are taking advantage of the slight price decline at the beginning of the week to make temporary purchases. The DAX may show an uptrend today after it closed slightly weaker yesterday, down 0.4% at 18,633 points. Investors are betting on a large interest rate cut by the US Federal Reserve.

As of midday, the DAX was up 0.8% at 18,783 points, its highest level since early September. This is within reach after last week’s rally of nearly 19,000 points.

Nevertheless, today’s gains will probably remain modest. The uncertainty is too great. “The German main index remains above the 21-day line (18,585), maintaining the upside opportunity,” wrote Helaba experts. “However, no additional stimulus is expected today.” Hesitation is dominant ahead of the Fed’s decision, especially since the technical situation is not very meaningful.

The experts at Index Radar think similarly: “There is little to no major new commitments before the Fed meeting. Trading is likely to be somewhat quiet.” However, considering the end of the month, seasonality should be taken into account. “The second half of September is one of the weakest periods for stocks,” they emphasize.

Tomorrow, the US monetary authorities will decide what to do next with interest rates. The market is confident that they will cut rates for the first time in more than four years, starting a turnaround in US interest rates. However, the scope and order of future rate hikes are public and will depend on economic data.

“For a long time, interest rate decisions have not been as interesting as tomorrow,” says Thomas Altmann, an analyst at QC Partners. The direction is clear, but the magnitude is unclear. “And since yesterday, the trend in the stock market has clearly been in the direction of XL 50bp down.” That would be a big rate move. “The stock exchanges are currently pricing in a 74% probability,” the expert says.

The recent strong New York Stock Exchange failed to find a common direction yesterday. The leading index, the Dow Jones Industrial, held on to 41,622 points, up 0.55% after hitting an early record high. The overall market, the S&P 500 Index, ended up 0.13% at 5,633 points. However, the Nasdaq 100, a tech-focused index, fell 0.47% to 19,423 points.

Some investors have been particularly cold toward rate-sensitive technology stocks, especially after the Nasdaq 100 rose nearly 6% last week. There remains some debate in the market about what the best Fed scenario is for investors when weighing interest rates and the economic outlook.

CMC Markets expert Jochen Stanzl warned that a “cautious approach by the Fed would be preferable”. He favored a cut of just 0.25 percentage points, based on “a concrete outlook for further rate cuts in the remaining two meetings of the year”.

The Euro fell slightly today. Market observers said there was a slight rebound after the recent price increase. According to market observers, investors tend to hesitate before the interest rate decision. The common currency traded at 1.1119 USD today, slightly lower than the previous evening. The European Central Bank (ECB) last set its key interest rate at 1.1126 USD yesterday afternoon.

Oil prices rose slightly today. The price of a North Sea Brent barrel for November delivery was $72.90 this morning. It was 15 cents higher than the previous day. The price of US West Texas Intermediate (WTI) crude oil for October delivery was up 31 cents at $70.40 per barrel. Earlier this week, US oil prices had already surpassed the $70 mark. The recovery from the large losses in the first half of the year has slowed compared to the previous trading day. The resistance of financial markets is also slowing down oil prices.

Intel, a struggling chipmaker, has put construction of its Magdeburg plant on hold. Company boss Pat Gelsinger said the project could be delayed by two years. The company had initially announced plans to build two chip factories in Saxony-Anhalt, but recently launched a savings program. Construction was scheduled to begin this year. Last year, the federal government pledged 9.9 billion euros in state aid to the settlement. Now the question is what happens to the money.

The postponement of the major Intel project announced in Magdeburg does not affect the construction of the first chip factory of Taiwanese semiconductor company TSMC in Dresden. Frank Bösenberg, managing director of the Silicon Saxony industrial network, said in response to questions from dpa that “the projects in Magdeburg and Dresden are independent of each other.” One looks optimistically to the future.

The specialty chemicals group Evonik is looking to increase sales with a new innovation strategy. The Essen-based group announced today that it wants to achieve an additional 1.5 billion euros in sales between 2023 and 2032. In the future, Evonik will focus and integrate its research and development in three key thematic areas: bio-based solutions, energy transition and circular economy. “The three new innovation growth pillars address the most relevant sustainability trends in our business,” says Evonik CIO Ralph Marquardt.

After the Federal Cartel Office announced that it would block the merger of Super RTL and children’s broadcaster Nickelodeon, the broadcasters called off the merger. RTL and Nickelodeon’s parent company Paramount withdrew their registration for the project, the competition watchdog said. “The planned merger project by RTL and Paramount would have affected the video advertising segment for the children’s age group of 3 to 13,” explained Andreas Mundt, head of the Cartel Office. This advertising market is so distinct that it must be distinguished from other advertising.

Microsoft wants to buy back billions of dollars of its own stock and pay shareholders a much higher dividend. The company announced that the world’s second-most valuable company wants to spend a total of $60 billion to buy back its own securities. The buybacks have no end date and can be terminated at any time. Microsoft also wants to pay shareholders a quarterly dividend of 83 cents per share, up 10 percent from the previous 75 cents per note. With about 7.43 billion shares currently on the books, the quarterly dividend would be just over $6 billion.

Volkswagen can imagine an expansion of its cooperation after the launch of the new Volkswagen transport vehicle developed together with Ford. “We are very satisfied with the cooperation,” Carsten Intra, head of the VW Light Commercial Vehicles division, told German media. “And we always look to see if there are opportunities to further expand the cooperation, because we complement each other very well in many areas.” Ford and Volkswagen agreed in 2020 to a broad cooperation in the area of ​​light commercial vehicles. This has since been extended to include electric vehicles.

Amazon employees will soon be returning to the office five days a week. In an email to employees, CEO Andy Jassy argued that working together is more efficient and brings teams closer together. Amazon currently allows employees to work from home two days a week. The new rules should take effect in early January to give employees time to adjust to their living arrangements, Jassy wrote.

With the US presidential election just seven weeks away, Facebook company Meta is taking steps to block the spread of Russian government propaganda on media outlets including the TV channel RT. Meta announced that RT (formerly Russia Today) and several affiliated organizations will be banned from the company’s apps globally. In addition to Facebook, the group also includes Instagram, WhatsApp, and Threads. RT has been blocked in the EU since spring 2022 due to its disinformation campaign surrounding Russia’s aggressive war in Ukraine.

The three-year term of office for Axtron CEO Felix Grawart has been extended until the end of August 2030. During his tenure as CEO, the Supervisory Board justified the extension by stating that he played a key role in the company’s success in the power electronics sector and more than doubled sales. The MDAX-listed chip systems manufacturer recently lowered its annual targets due to the business downturn and is now targeting sales of EUR 620-660 million and an EBIT margin of around 22-25 percent for 2024.

Fans of “Emily in Paris” can look forward to another season of the hit Netflix series. “It’s official: Emily in Paris is coming back for season 5!” the streaming platform and its star Lily Collins announced on Instagram. In the short clip, Collins can be seen holding a cup of espresso. “There’s no place like Rome,” the British actress says, winking at the camera. The RomCom series from TV legend Darren Star is about Emily, an ambitious marketing professional from Chicago who moves to the French capital for work. She meets a blunt and kind crowd. She falls in love with the city, especially with a handsome but romantic chef.