Market Report: DAX is recovering strongly

The DAX rose 1% despite a widely expected rate cut by the European Central Bank (ECB). Wall Street is still struggling to find its bearings.

After a solid start and temporary losses following the ECB rate decision, German stocks rose again towards the end of the session. The DAX closed at 18,518 points, up 1%.

Before the European Central Bank (ECB) cut interest rates at 2:15 p.m., the German main index had already risen to 1.4%. As expected, the monetary authority cut the deposit rate by 0.25 percentage points to 3.50%. Profit-taking has begun, especially since the future direction of European monetary policy is still uncertain. “The ECB Council does not commit to a specific interest rate path in advance,” ECB President Christine Lagarde explained. Further steps depend on data. This lack of clarity is not recognized in the stock market.

The New York Stock Exchange got off to a cautious start on Thursday, with the Dow Jones Industrial Average currently trading down 0.1% at 40,861.

Meanwhile, Nasdaq’s technology stocks could see a slight uptrend.

Yesterday, the U.S. stock market reacted surprisingly strongly to stubbornly high core inflation. After initial losses, prices gradually recovered and the major stock indexes closed higher, mainly driven by gains from chip giants.

Nvidia President Jensen Huang’s statement ensured a good mood in the US technology sector. At a conference held by the US investment bank Goldman Sachs in San Francisco, he said that there is a high demand for rare chips from leading companies in terms of artificial intelligence (AI). “In New York, the AI ​​fantasy has come back to the exchanges in earnest,” said Jurgen Molnar, a market analyst at trading firm Robomarkets.

The euro has benefited from the ECB’s unclear future interest rate path. The common currency is currently trading at $1.1037, up 0.24% from yesterday.

Falling interest rates in Europe and the prospect of a first rate cut by the US Federal Reserve next week have further boosted gold prices. In the early evening, a troy ounce (31.1 grams) was trading at a record high of $2,552. In euro terms, prices also hit a record high, surpassing €2,300 for the first time. Gold itself does not pay interest, so the possibility of falling interest rates on government bonds, for example, increases demand for gold.

Oil prices recovered their downward trend for the second day in a row. In the early evening, a barrel (159 liters) of North Sea crude was trading at $71.56, up about 2.6% from yesterday. Some U.S. oil production was temporarily shut down as a tropical cyclone hit the U.S. southern coast.

The International Energy Agency (IEA)’s new demand forecast also did little to curb the growth. As a result, demand is suffering from the slowdown in China. Crude oil demand increased by an average of 800,000 barrels per day in the first half of the year, a significant decrease from the same period last year. It said that demand growth in the first half of this year was weaker than since 2020.

In New York, shares of vaccine maker Moderna fell to their lowest level since November 2023. The company’s revenue forecast for next year is below the average analyst estimate. In addition, rival BioNTech has pushed back its breakeven target from 2026 to 2028. But Michael Yee, an analyst at investment firm Jefferies, questions whether Moderna has enough cash to break even without raising additional equity. Now Moderna is looking to slash its research and development budget by about a fifth over the next three years to boost profitability.

In the dispute over possible cuts at Volkswagen, IG Metall and the group want to meet for negotiations within two weeks. The company and the union announced that collective bargaining began in Hanover on September 25. In addition to the regular wage round, the employment security that VW recently ended must also be negotiated. This has brought the collective bargaining, originally scheduled for October, into full swing. Volkswagen announced in early September that due to the tense situation, it would strengthen its savings plan and would no longer rule out layoffs and plant closures. The employment security system that has been in place since 1994 is ending.

According to insiders, Commerzbank wants to block a possible takeover by Italy’s major lender UniCredit. One person familiar with the matter said management had exchanged strategies to maintain the bank’s independence. The bank would be willing to engage in discussions as required by law if UniCredit made a formal offer, according to two other people. However, the board is aiming for an independent process. There were also reports from the company that Goldman Sachs, a U.S. bank, had been hired as a consultant to explore various defense options. Commerzbank declined to comment.

Meanwhile, Andrea Orcel, UniCredit’s chief executive, has reiterated his interest in a possible purchase. He told news channel Bloomberg TV that a Commerzbank acquisition is an option. But he also stressed that the bank is flexible in how it does business. It can increase or decrease its share. He feels no time pressure at all. “We are very patient.”

Bayer has won another case in the legal battle over alleged cancer risks from its glyphosate-containing herbicides in the United States. The DAX company announced that night that a jury in Philadelphia had ruled in favor of the pesticide and pharmaceutical company. Bayer has won 14 of its last 20 cases. The wave of glyphosate lawsuits has already cost Bayer billions of euros. The company is now looking to a fundamental decision from the US Supreme Court.

The science publisher Springer Nature plans to list on the Frankfurt Stock Exchange this year. The IPO is likely to be completed by the end of 2024, depending on market conditions, the company said. The publisher has therefore confirmed a report by Reuters. The offer consists of a €200 million capital increase and the sale of existing shares in the BC Partners portfolio. Major shareholder HPG (Georg von Holtzbrinck Publishing Group) does not wish to sell shares at the time of the IPO. The targeted float is expected to be sufficiently large to create a liquid market for Springer Nature shares.

Also in 2025, a German biotech company could go public for the first time in eight years. Pentixapharm, a subsidiary of the medical technology group Eckert & Ziegler, plans to list on the Prime Standard, a strictly regulated German stock exchange, in the fourth quarter. Pentixapharm specializes in the development of radiopharmaceuticals, including those for the treatment of blood cancers. The most advanced projects are already in the third and final phase of clinical development. The company was founded in 2019 and employs around 80 people. As an SDAX company, Eckert & Ziegler wants to focus on its core business of isotope production.

Chip industry supplier Aixtron sees Infineon’s progress in producing gallium nitride-based (GaN) semiconductors as supporting its expectations for strong market growth. The chipmaker announced yesterday that it has produced 300mm GaN wafers on a pilot line for its existing 300mm silicon production. This has raised many questions in the stock market regarding Aixtron’s product offering. When asked, Aixtron emphasized that it is developing machines for 300mm wafer production and that some customers have pilot systems.

The leasing subsidiary of China Development Bank has placed a major order with Airbus. It announced on the Hong Kong Stock Exchange that it has ordered 80 A320neo aircraft. Machinery deliveries are scheduled to begin in 2030 and be completed by 2032. With this purchase, the company aims to optimize the aircraft mix of the aviation sector and increase the proportion of highly efficient next-generation aircraft.