Status: 07/25/2022 07:39
The DAX is still consolidating its recent 1000 point rally. On the first trading day of the new trading week, the main German index is initially expected to decline.
Negative specs from foreign exchanges put the main German index under pressure at the start of the new week. Broker IG rates German Standard Values 0.7% lower at 13,166 points.
DAX consolidation continues. The previous week, the DAX had gained a whopping 3.0%. At the top, the price gains from the low hitting at 12,434 points even amounted to over 1,000 points.
DAX recovery trend intact – for now
The bottom line is that the recovery trend is still intact, so from a technical standpoint, the DAX has a good chance of continuing its northward course once the current consolidation is over.
Technical analysts at HSBC meanwhile consider the current DAX consolidation to be “fairly trouble-free”. Only a slip below the holding zone above 12,900 points – this is where the recently halted downtrend has continued since early June – would worry them. “Beneath that, the view would then turn south again and hope for an end to the bear market would be lost.”
Uncertainties about gas and Italy
Also from a fundamental point of view, many negative factors and uncertainties are forcing investors to exercise restraint at the start of the week. Some economists and analysts doubt that the natural gas supplies that Russia resumed last week are now permanent.
Additionally, there are concerns about the political future of Italy, where snap elections are due to be held at the end of September. This has recently driven Italian yields higher and the yield spread (spread) with the Bund has widened. It is quite possible that the ECB’s new anti-fragmentation instrument will have to be deployed more quickly than the monetary gendarmes would like.
Focus on the Fed meeting
The upcoming US Federal Reserve meeting this week is also causing uncertainty among investors. The Fed raised interest rates by 0.75 percentage points in June – the biggest rate hike since 1994.
Currency watchdogs around Jerome Powell are expected to take another step of this unusual magnitude on Wednesday, according to many experts. US Treasury Secretary Yellen told NBC TV yesterday that inflation was “far too high”. The Fed’s recent measures are useful in combating them.
Dow Jones weakened
Negative guidelines for DAX trading come from foreign exchanges. On Friday, disappointing figures from companies in the technology sector had darkened the mood on Wall Street. The Dow Jones Standard Values Index closed down 0.4% at 31,899 points. The broad S&P 500 lost 0.9% to 3,961 points.
Significant losses on the Nasdaq
The tech-heavy Nasdaq outperformed negatively with a minus of 1.9% at 11,834 points. Weakening advertising revenue sent shares of Snapchat operator Snap tumbling 39% to their lowest level in more than two years.
Economic fears weigh on Nikkei
Against the backdrop of weak Wall Street performance, Asian markets also initially lost ground today. Fears of a global economic slowdown are undermining investors’ risk appetite. The Nikkei index, which includes 225 stocks, was 0.8% lower at 27,705 points. The Shanghai Stock Exchange fell 0.2%.
The euro holds the 1.02 dollars
The Euro is moving sideways in Asian currency trading. Currently, 1.0206 dollars are paid for one euro. But a new relapse towards parity has not yet been ruled out. “A retest seems likely, possibly with a drop to the 0.95 mark,” said market expert Robert Rethfeld of Wellenreiter-Invest. An ounce of gold currently costs $1726.
Focus on VW shares after the withdrawal of Diess
At the start of the new week, the DAX is focused on VW stock. The Wolfsburg automaker swaps its CEO. Herbert Diess will be replaced on September 1 by Oliver Blume, who will also remain at the helm of the sports car subsidiary Porsche, VW surprisingly announced after a supervisory board meeting on Friday evening. According to insiders, the impetus for Diess’ split came from the VW, Porsche and Piech-owning families.
T-Mobile US: comparison with data theft worth millions
Telekom’s US subsidiary T-Mobile US wants to settle user complaints after a major hacker attack with a payout of half a billion dollars. According to the agreement released over the weekend, $350 million will be paid into a fund for US customers who are suing. Another $150 million is to be spent this year and next to improve cybersecurity.
Supplier Schaeffler takes over drive manufacturer
With the Swedish group Ewellix, Schaeffler wishes to acquire a manufacturer of drives and thus expand its industrial division. The automotive and industrial supplier from Herzogenaurach in Franconia will pay around 582 million euros for the subsidiary of the investment company Triton, as Schaeffler announced yesterday.