For now, investors’ appetite for stocks appears to have been sated after a long winning streak. Experts expect, however, that the DAX could soon move up again.
The DAX lost around 0.5 percent to 14,456 points by midday. Neither the prospect of further easing of China’s zero-Covid policy, nor the possibility that the ECB could hike interest rates less sharply at the next meeting are attracting investors to the stock market today.
France’s central bank governor Francois Villeroy de Galhau had spoken out in favor of only raising interest rates by 50 rather than 75 basis points on December 15. He thus strengthened expectations that the ECB will slow down the pace of monetary tightening.
Signs of weakness in retail
Fresh retail data was weak. Eurozone retailers’ revenue fell 1.8 percent from September, according to the European Union’s statistical office (Eurostat). Sales increased by 0.8 percent in September. Compared to October 2021, retail sales fell by 2.7 percent. The strong price increases in the euro area are reducing the purchasing power of consumers.
However, the weakness could have positive implications for the stock market as it should give monetary policymakers at the European Central Bank (ECB) a reason to slow down on rate hikes.
“stock exchange light is green”
Despite the current breather, experts remain optimistic: “So far, the fourth quarter has been balm for the battered investor souls,” remarks Markus Reinwand from Helaba. Even if things are now moving at a somewhat more leisurely pace, the prospects on the stock market remain favourable. “In the medium term, the traffic light on the stock exchange will continue to be green.
“Christian Barth, market expert at Fürst Fugger Privatbank, describes how things could go from a technical point of view: “Before the DAX can continue to march towards 14,800 points, the high of 14,571 points on November 24/25 must be sustainably overcome”. The DAX is currently struggling with this. According to Barth, should the consolidation continue, the DAX could quickly test the area around 14,150/14,125 points, according to the expert.
Oil prices are advancing
Oil prices are increasing today, both the Brent and WTI varieties rose in price. At the start of the week, the European Union put an extensive embargo on Russian oil into effect. In addition, the EU wants to work with other large countries to push through a price cap for Russian oil. Russia has announced that it will not accept the price cap and will not ship to any country that adheres to the cap.
Meanwhile, the oil alliance OPEC+, led by Saudi Arabia and Russia, decided at the weekend to leave its production unchanged for the time being . Since the beginning of November, the 20 or so countries have been producing significantly less oil, and this is to be maintained. The decision was expected on the market.
Euro loses profits again
The euro initially appreciated today and had risen to its highest level in a good five months. On Monday morning, the common currency temporarily cost up to 1.0587 US dollars, the highest it has been since the end of June. However, the euro was unable to maintain this level.
FlatexDegiro under pressure after Bafin special test
The result of a special audit by the financial regulator Bafin sent the FlatexDegiro share plummeting. The titles of the online broker opened almost 40 percent in the red and leveled off with a minus of 25 to 30 percent at around 7.50 euros – the lowest level in almost three years. The group announced a restructuring of the board and risk management at the weekend because the Bafin had identified deficiencies in business practices and corporate governance.
In addition, FlatexDegiro will retain the annual surplus due to new capital requirements. As a result, the broker lowered its revenue and earnings targets for 2022 four weeks before year-end.
Vodafone boss surprisingly gives up his post
The boss of the British telecommunications group Vodafone, Nick Read, surprisingly resigns from his post after four years. As the company announced today, Read will be stepping down from the top post at the end of the year and is also stepping down from the company’s board of directors. However, he will remain his advisor until the end of March next year.
First Lufthansa A380 landed in Frankfurt
Lufthansa’s first A380 wide-bodied jet has landed at Frankfurt Airport and is scheduled to be reactivated next summer. The machine came on Friday evening from Teruel, Spain, where it had been parked permanently after the corona shock on May 5, 2020.
S&P withdraws Twitter rating
The rating agency Standard & Poor’s (S&P) has withdrawn its credit rating for Elon Musk’s online platform Twitter due to a “lack of sufficient information”. Musk bought Twitter for around $44 billion at the end of October. The star entrepreneur took the short message service off the stock market so that it no longer had to submit public business reports.
As part of the acquisition, Musk saddled Twitter with billions of dollars in debt. Due to these burdens, S&P lowered the credit rating by five notches to “B-” on November 1 – and thus even lower into the so-called junk area for highly speculative investments.
Chemical company Ineos gets US gas
The chemical group Ineos has signed a 20-year contract for the supply of natural gas from the USA to Germany. 1.4 million tons of liquefied natural gas (LNG) are to be shipped per year, starting in 2027, as the British group announced. Ineos has a subsidiary based in Cologne that was formerly a joint venture between BP and Bayer.