Market report: DAX should regain territory

Market report

Status: 10.01.2022 8:16 a.m.

After two losing days in a row, the DAX should recover slightly today. Recently, inflation worries had bothered investors, now they are hoping for fresh impetus from the balance sheet season.

Banks and brokers expect the DAX to start trading with premiums. At the end of the week, the leading German index had gone 0.7 percent lighter to 15,947.74 points. For the first week of trading in 2022, this results in an increase of 0.4 percent. In the middle of the previous week, the DAX had reached its record high of 16,285 points, up to five points, before going backwards again.

The previous week had two faces with initial enthusiasm and then strong inflation concerns, said market analyst Michael Hewson from broker CMC Markets UK. Wall Street in particular had feared that the US Federal Reserve might have to counter inflation much more strongly than previously thought.

Balance season begins

In the current week, investors are looking to the slowly starting reporting season, which could provide fresh impetus. Craig Burelle of the American investment house Loomis Sayles assumes that inflation concerns and fears of rising interest rates will ease in the coming weeks and instead move company balance sheets more into the foreground. “We therefore expect solid fundamentals and earnings growth in 2022,” predicts the expert.

Citigroup, JPMorgan and Wells Fargo will release financial results next Friday. The world’s largest asset manager Blackrock joins them.

US job data add to interest rate worries

On Friday the Dow Jones closed practically unchanged at 36,231.66 points. The S&P 500 lost 0.4 percent to 4677.03 points. For the technology-heavy Nasdaq 100, it fell 1.1 percent to 15,592.19 points. It lost 4.5 percent in the first week of trading of the year. Tech investors worry that rising interest rates could slow the momentum in the growth industry.

In Asia, investors are holding on Tending to decline Monday according to the latest US job data. The decline in the US unemployment rate to 3.9 percent and the rise in wages suggest the economy ran out of workers in December. “This is in line with the Fed’s evolving view that the labor market is approaching or has already reached its peak and that wage pressures are mounting,” wrote analysts at NatWest Markets, referring to the Federal Reserve.

This is likely to intensify speculation about a rate hike in March, according to market watchers. As wages rise, inflation becomes more likely to persist.

The Tokyo Stock Exchange remained closed for a public holiday. The Shanghai Stock Exchange was 0.3 percent up. The index of the most important companies in Shanghai and Shenzen gained 0.4 percent.

Munich Re presents natural catastrophe balance sheet

Investors will take a look at Munich Re today: the reinsurer will publish its new global natural catastrophe record at 11 a.m. today. Because of the many storms in Europe and the USA, high damage is to be expected. For Germany it is already certain that 2021 will be the year with the most expensive natural disaster of all time. The July flood in North Rhine-Westphalia and Rhineland-Palatinate caused total damage of well over 30 billion euros. Only a comparatively small part of it was insured.

In the United States, Hurricane Ida alone also caused double-digit billion damage, as well as a series of devastating tornadoes. Insurance companies as well as scientists observe that global warming means that extreme weather events occur more frequently. Even if the amount of damage varies from year to year, the trend is upwards in a long-term comparison.

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