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Thursday, August 11, 2022

Market report: DAX still has room for improvement

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market report

Status: 04.08.2022 07:54

By midweek, the German leading index was higher than it had been since mid-June. Today, he has a good chance to bet on his recent price gains.

The DAX is likely to start XETRA trading at a premium. Broker IG sees the German Standard 40 0.3% higher at 13,635 points. The DAX would thus smoothly continue its recent uptrend. After a slow start, Germany’s main index rose 1.0% to 13,588 points yesterday and returned to mid-June levels.

DAX defends important brands

From a technical perspective, it is positive to point out that the DAX bulls were again able to defend the upward price gap that opened on Friday morning (gap below 13,289 points). The closing price was also well above the July 20 high (13,399 points).

The inverse shoulder-head-shoulder formation in the DAX is therefore still valid. This is a classic chart technical reversal formation and a harbinger of further price gains.

Dow Jones and Nasdaq on the rise

The tailwind for the DAX comes from Wall Street. There, recent tensions between the United States and China over Taiwan faded into the background by midweek. Instead, encouraging corporate balance sheets and strong economic data gave U.S. equity markets a strong boost.

The Dow Jones gained 1.3% to nearly 32,813 points. The tech-heavy Nasdaq rose 2.6% to 12,668 points and the broad-based S&P 500 gained 1.6% to 4,155 points.

Nikkei with profits

Good guidance from Wall Street also whetted investor appetite in Asia this morning. The Nikkei index, which includes 225 stocks, was up 0.5% to 27,893 points. The Shanghai Stock Exchange rose 0.5%. The index of large companies in Shanghai and Shenzhen gained 0.5%.

Gold is always wanted

The dollar weakened slightly in Asian forex trading. Meanwhile, the euro rose 0.1% to $1.0164. The price of gold rose 0.4% to $1,771 per troy ounce. Hopes that the Fed won’t be too bold on upcoming interest rate decisions are giving the precious metal a boost.

The German reporting season is in full swing

In the German stock market, investors face a hot day in reporting season today, with quarterly figures from the DAX alone from Merck KGaA, Zalando, Bayer and Beiersdorf as well as detailed numbers from Adidas.

Merck KGaA stays on course for growth

In the second quarter, the pharmaceutical and chemical group Merck KGaA was able to maintain the momentum it had at the start of the year. Group sales increased by more than 14% to reach 5.6 billion euros. Adjusted earnings before interest, tax, depreciation and amortization (Ebitda) of 1.8 billion euros was 13% higher than last year, corresponding to a margin of 32%.

Falling consumption hits Zalando harder than expected

Online fashion retailer Zalando had to accept lower sales and profits in the second quarter. This is due to declining consumer sentiment, inflationary pressures and delivery bottlenecks. The net result was 14 million euros as profit and therefore a fraction of the 120.4 million euros made the previous year. The numbers were even worse than analysts had expected.

Ebay Exceeds Expectations

Online commerce platform Ebay continues to struggle after the end of the pandemic-related internet ordering boom. In the second quarter, sales fell 9% year-on-year to $2.4 billion. The stock initially jumped 4% in after-hours trading. Analysts expected a worse annual report and outlook.

Bad neighborhood for Toyota

Semiconductor shortages and production disruptions due to the corona pandemic in China weighed on Japanese automaker Toyota in the fiscal first quarter. Operating profit surprisingly fell 42% to 578.7 billion yen (about 4.3 billion euros), as announced by the world’s largest automaker. Analysts expected a much smaller decline.

Source www.tagesschau.de

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