Market report
Status: 07.10.2021 10:06 a.m.
Recovery is the motto of the hour in the global stock markets. The DAX made a leap up at the start. How far can the German standard values go up now?
The DAX started the new trading day with a huge upward gap. At the opening on XETRA, the 40 German standard values go up 1.3 percent to 15,163 points. Signals of hope in the US debt dispute and the more relaxed situation on the oil market are providing positive impetus for the German stock market.
“Now it will be exciting to see whether further price gains are sustainable and lay the foundation for a Christmas rally or whether price gains are immediately viewed as sales opportunities again”, notes market expert Thomas Altmann from QC Partners.
The technical picture for the German benchmark index has now brightened significantly. With its price jump today, the DAX has not only recaptured its most recent lows, but also and above all the 200-day line (currently at 15,029 points).
This moving average of the past 200 trading days is an important indicator for the medium to long-term trend. According to the technical experts from HSBC Trinkaus & Burkhardt, Tuesday’s “swing high” at 15,202 points is now a first recovery goal.
15,500 points in sight
At this point the courses had turned around midweek and plummeted. Recapturing this weekly high would consequently erase all price losses that have started since then.
However, the 15,200 points would only be an interim goal for the DAX bulls before the picture for the German leading index would brighten significantly and, above all, sustainably. Above 15,500 points, there is an important resistance zone with the April high (15,501 points) and the downward price gap at the end of September (15,541 to 15,552 points).
On the bottom it is now important to avoid falling back below the 15,000 point mark. Otherwise the technical picture in the DAX would suddenly deteriorate again.
German production collapses
Meanwhile, negative signals for the DAX are coming from the economic front. The German economy cut production in August more sharply than it has since April 2020. Industry, construction and energy suppliers together produced 4.0 percent less than in the previous month.
LBBW economist Jens-Oliver Niklasch spoke of a “severe setback”, the catching-up process had stalled. “Delivery bottlenecks, high energy prices and production losses: a toxic brew that smells slightly of stagflation.”
US labor market data in focus
In the further course of the day, the weekly numbers from the US labor market are expected before Wall Street opens. They are likely to provide a reference to the government’s monthly job report due on Friday.
Analysts are eagerly awaiting the report because it is likely to have an impact on the US Federal Reserve’s short-term monetary policy. Should the data turn out to be too good, this could encourage the Fed in its tapering course. That would be a bad signal for stocks.
On the other hand, the good indications from the USA provide relief on the global stock markets. By midweek there was a glimmer of hope that the Democrats and Republicans could come to an agreement in the dispute over government spending.
This would end a month-long stalemate. Finance Minister Janet Yellen and other experts had recently warned in increasingly urgent tones of the disastrous consequences for the financial markets , should there not be a solution and the USA steer towards insolvency.
The US benchmark index Dow Jones closed 0.3 percent stronger at 34,416 points, around 560 points above its daily low. The technology-heavy Nasdaq advanced 0.5 percent to 14,501 points, the broad S&P 500 0.4 percent to 4,363 points.
Senate leader Mitch McConnell had previously announced that his party would support an extension of the federal debt ceiling through December. That would buy President Joe Biden’s Democrats time to look for a longer-term solution.
The good specifications from Wall Street also provide relief on the Asian stock exchanges and attract bargain hunters to the floor. The Japanese leading index Nikkei, comprising 225 values, closed 0.5 percent higher to 27,678 points. The winners include cyclical stocks.
Oil prices extend yesterday’s losses. A barrel (159 liters) of North Sea Brent costs $ 80.48, 1.0 percent less than the day before.
On Wednesday, oil prices initially rose to multi-year highs, but then fell significantly when Russian President Putin promised “record amounts” of gas deliveries to Europe had asked. Oil prices are also being negatively impacted by the sharp rise in crude oil inventories in the USA.
The euro can make up little ground in the morning. The European single currency currently costs 1.1566 dollars. The day before, rising risk aversion had drove investors in droves into the “safe haven” of the US dollar. The euro had fallen to $ 1.1529, its lowest level since July 2020.
The strong dollar is depressing the demand for gold from the non-dollar area. Accordingly, the yellow precious metal has been in a difficult position for weeks. At the moment, an ounce of gold costs 1763 dollars, 0.1 percent less than the day before.
Germany’s largest apartment rental company Vonovia secured a comfortable majority in rival Deutsche Wohnen in the second attempt. At the end of the acceptance period, which expired on Monday, Vonovia came to 60.3 percent of Deutsche Wohnen shares. Nothing stands in the way of the merger of the two DAX groups.
The other Deutsche Wohnen shareholders will now have another opportunity from Friday to October 21 to send their papers to Vonovia for EUR 53 each Selling. The Bochum-based company has ruled out a profit transfer and domination agreement that would result in a further – possibly higher – offer for the next three years.
The commercial vehicle manufacturer Daimler Truck plans to start production of its first electric series truck today at 2 p.m. in Wörth. The eActros has a range of up to 400 kilometers. In the transition from internal combustion engines to new drives, the manufacturer relies on batteries and fuel cells.
If you were hoping for a countermovement in the Teamviewer’s papers after yesterday’s 25 percent price slump was mistaken. Teamviewer shares fell again by more than three percent in early trading, making them again by far the weakest value in the MDAX.
The provider of software for remote computer maintenance and video conferencing had shocked investors the day before by lowering its annual targets and bringing the shares to a record low.
Nordex shares are in demand in the SDAX. The wind turbine manufacturer has received another order from the Ukraine. For the Eco-Optima group of companies, the Germans are to deliver ten turbines for a 54.6 megawatt wind farm, including a maintenance contract for 15 years.
The US short message service Twitter is selling the mobile advertising company MoPub for $ 1.05 billion in cash. The buyer is the mobile game provider AppLovin. Twitter acquired MoPub in 2013 for just under $ 350 million. AppLovin went public in April. MoPub had sales of $ 188 million last year.
Levi Strauss benefits from increasing demand for new clothing as employees return to the office. For the third quarter, the US jeans company posted adjusted earnings of 48 cents per share. Analysts, on the other hand, had only expected 38 cents per share. Levi Strauss returned to the stock exchange in March 2019 after an absence of more than 30 years.
Rivals of the world’s largest search engine provider, Google, have appealed to the EU to further restrict the power of the US technology company. In a joint letter, the rival search engine companies Ecosia from Germany, DuckDuckGo from the USA and Qwant and Lilo from France called on EU competition commissioner Margrethe Vestager to use the new regulations to control large technology groups to introduce new requirements for search engines. This should create more competition.
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