Market report: are the DAX bulls taking a break?

Market report

Status: 08.11.2021 07:46 a.m.

The DAX remained at a high level at the beginning of the week. But the momentum seems to be out for now. A pause after the latest rally would be well deserved and not a cause for concern.

Things are noticeably quieter on the German stock market at the beginning of the week after the recent strong price rally. Banks and brokers currently rate the German benchmark index 0.1 percent lower at 16,030 points. From a technical perspective, however, this is not worrying.

The signs that the rally will resume soon are good, considering that the DAX set a new record high at 16,085 points on Friday and thus sent one of the best buy signals that technical analysis has to offer.

On the plus side, the DAX bulls can also record that the German benchmark index left the weekend at 16,054 points, above its old record of August (16,030). Even on a weekly closing price basis, there is now a new record high.

Tapering, na und!?

In terms of monetary policy, the US Federal Reserve gave the go-ahead for further price gains on the stock markets last week. The Fed has once again managed to “professionally sell the start of tapering to the market as something positive that investors had almost no choice but to stick to their optimistic attitude towards stocks,” commented Jochen Stanzl, chief analyst CMC Markets .

In addition, a strong US labor market report signaled to investors that the US economy is still on a strong recovery path. In combination with a falling oil price, the stagflation specter could first be driven away. Concerns that the strength of the job market could force the Fed to act have been brushed aside for now.

The prospect that the pharmaceutical company Pfizer has an effective pill in the fight against the corona pandemic also created a shopping mood on Wall Street at the end of the week. The corollary: all of the major indices set new records in early business.

After a temporary increase of about one percent, the Dow Jones Industrial went 0.6 percent higher at 36,328 points from trading. The market-wide S&P 500 gained 0.4 percent to 4698 points. The technology-heavy Nasdaq 100, however, took it easy after its particularly strong rally. With 16,359 points it closed just 0.1 percent plus.

Mixed signals are coming from the stock exchanges in Asia. The Japanese Nikkei index, comprising 225 values, closed 0.4 percent lower at 29,507 points. The Shanghai stock exchange, on the other hand, is currently trading 0.2 percent up.

The Chinese import and export data released over the weekend give investors pause: China’s exports exceeded forecasts in October and led to a record trade surplus, but the deficit in imports was seen as a sign of a slowdown in domestic demand.

The gold price continues its rally at the beginning of the week. The price of one troy ounce of the yellow precious metal rose 0.3 percent to $ 1,821. According to the strong US labor market report on Friday, the price of gold had taken the $ 1,800 mark by storm. The euro is trending sideways at $ 1.1566 in early trading.

The wind turbine manufacturer Siemens Gamesa also expects problems in the supply chain and logistics in the new fiscal year. Due to the difficult environment, the subsidiary of the DAX group Siemens Energy expects a drop in sales of 2 to 7 percent in the 2021/22 fiscal year (as of the end of September). The analysis house Jefferies spoke of a “negative surprise”.

The interim participation in the construction of a Chilean hydropower plant costs the Hochtief construction company many millions a few years later. A decision in the arbitration proceedings on the old project in the South American country, from which the group withdrew in 2017, will burden the result this year with around 195 million euros.

In a vote initiated by Elon Musk on Twitter, a majority of the participants voted for a sale of a billion-dollar block of shares in the Tesla boss. After the 24-hour deadline, 57.9 percent of the 3.5 million participants had voted “Yes”. Musk had asked if he should sell ten percent of his shares in the electric car maker for higher tax payments.

The IT security company McAfee could be sold to a group of holding companies for more than ten billion dollars, according to a media report. The deal with financial investors like Advent and Permira could already be announced on Monday, wrote the “Wall Street Journal” on Friday evening. McAfee shares then jumped around a fifth in late trading.

Disruptions in global supply chains weighed on the business of the holding company of star investor Warren Buffett in the third quarter. The operating result remained with an increase of 18 percent to 6.47 billion dollars behind the market expectations. Berkshire also cashed in by selling blocks of shares: The company now has cash of $ 142.9 billion – more than ever.

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