market report
Ongoing uncertainty over the future interest rate policies of major central banks slowed investors down today. Stock market moves are manageable, but tensions remain high.
The DAX index fluctuated within a narrow range today, closing slightly higher. Investors continued to focus on the 16,000-point mark and achieved a small breakthrough in the meantime. The daily low was 15,925.
Finally, the German Leading Index closed at 15,992 points, up a modest 0.18% on the day. Markets remain elevated but lack strength right now ahead of key central bank decisions in the week ahead.
“The DAX is consolidating, lacking any momentum, and that applies equally to both directions,” said Konstantin Oldenburger, market analyst at CMC Markets. According to his estimates, the near-lethargic mood on the stock exchange will last at least until next week U.S. and Eurozone central bank meetings.
The US Federal Reserve (Fed) – June 14 – and the European Central Bank are due to decide on further rate hikes next week. It’s not unusual for investors to remain paralyzed during the run-up. In particular, the US will also release new inflation data on June 13.
“The week ahead should be very interesting in terms of interest rate policy,” said Christian Henke from IG Markets. “U.S. inflation data will be released a day before the FOMC meeting on June 14. If the decline continues, the Fed may consider a pause in rate hikes, Wall Street is speculating right now. Recent economic data has been slightly softer, which is not conducive to economic recovery.” Further tightening, but developments in inflation may be decisive.
In the Eurozone, on the other hand, only a handful of optimists currently expect a pause in interest rates. Yesterday, ECB President Christine Lagarde raised the possibility of further rate hikes at the European Parliament’s Economic and Monetary Affairs Committee.
The head of the Dutch central bank, Klaas Knott, said that the European Central Bank must further tighten interest rate policy. Knott said this must continue “for as long as necessary” until a return to the ECB’s medium-term target of 2 percent is foreseeable. “But we will do it step by step,” he added. The tighter monetary policy is, the greater its impact.
New orders from German industry had a negative impact on investors. In April, she unexpectedly had to endure another drop in orders. Orders unexpectedly fell by 0.4% compared to the previous month, according to the Federal Statistical Office report.
“Contrary to expectations, new orders did not recover in April despite the decline in March,” commented Jörg Krämer, Chief Economist at Commerzbank. This is a bad sign. “The technical recession in the winter half of the year is not a mistake.” Coupled with the global interest rate hike, there are many signs that the German economy will shrink again in the second half of the year. Alexander Krüger, chief economist at private bank Hauck Aufhäuser Lampe, described the figures as a huge disappointment: “It’s making the economy feel more and more sick.”
U.S. investors haven’t jumped too far out of the window, either. However, the major indices have now changed their signs and are all marginally higher. However, fluctuations are still manageable between 0.1% and 0.4%.
U.S. stock exchanges ended the past week on a friendly note thanks to the resolution of the U.S. debt dispute. Since then, an uncertain economic outlook and expectations of a Fed rate decision have increasingly come into focus.
The U.S. Securities and Exchange Commission has also taken rival Coinbase to court, a day after it filed a lawsuit against Binance, the world’s largest cryptocurrency exchange. SEC boss Gary Gensler wrote on Twitter today that the firm operates an unlicensed trading platform. This deprived Coinbase investors of important protections against fraud and manipulation.
The company could not immediately be reached for comment. Shares in cryptocurrency exchanges have plunged as much as 20% on Wall Street and are now down more than 12%. Web currencies bitcoin and ethereum are responding to volatile trading and are currently edging up again.
Apple shares remained down about 0.7 percent in the market. Apple showed off its long-awaited data glasses — its first new product category in nine years — at its WWDC developer conference that evening. The headset can show digital objects in the real environment on its display.
The euro pared modest gains at the open and has been slightly weaker recently. The common currency was trading at $1.0692 in late afternoon, slightly lower than the previous night. The European Central Bank (ECB) set the reference rate at 1.0683 (Monday: 1.0690) USD.
A survey by the European Central Bank showed that consumer inflation expectations in the euro zone dropped significantly in April, which aroused market concern. Consumer sentiment on inflation and uncertainty about future inflation also declined. High inflation has trended back in recent months, standing at 6.1% in May.
Oil prices have now capped deeper losses but are still in the red. The cost of a barrel of North Sea Brent crude and US light crude WTI fell by about 0.5%. Prices were initially supported yesterday by oil giant Saudi Arabia announcing deep production cuts. However, the effect wears off quickly.
The previous tumultuous OPEC+ oil alliance meeting clearly left its mark on the market. There was supposed to be a major debate about production quotas for African OPEC countries. In addition, other OPEC countries did not cut production further.
Among individual stocks, shares of Merck are highly sought after. The Darmstadt-based pharmaceutical and technology group is sticking to its broad base and does not plan to make any major acquisitions in the pharmaceutical business. “I believe diversity is an absolute advantage,” Merck CEO Belen Garijo said at the International Club of Business Journalists (ICFW) in Frankfurt in the evening.
Support for the strategy also comes from founding family Merck, which still owns about 70% of the company. This gives the team great stability. “The owner wishes to retain a diversified company operating in three attractive markets.”
Zalando, on the other hand, is at the bottom of the index. Zalando has fallen more than 5.0% over the past two sessions following a negative analyst opinion from JPMorgan. Analyst Georgina Johanan is skeptical about the online fashion retailer’s growth. According to experts, Internet access data and brand dynamics indicators showed that business dynamics in Germany slowed down in May.
Commerzbank first announced a buyback of its own shares. From June 7 to July 31 at the latest, she will buy back her thesis worth up to 122 million euros on the market. The repurchased shares will then be returned. Commerzbank posted another billion-dollar profit in 2022 after the German government provided a multi-billion-euro bailout and costly restructuring plan during the 2008/2009 financial crisis. There should be more this year.
The sale of ThyssenKrupp’s maritime subsidiary is clearly taking shape. “The process is ongoing,” a company spokesman said in a report in Frankfurter Allgemeine Zeitung. It says that the Investor Information Room will open soon. Oliver Burkhard, head of ThyssenKrupp Marine Systems (TKMS), has held a number of meetings with potential buyers over the past few weeks, as Reuters learned in April from a person familiar with the matter.
Deutsche Börse included drug research firm Evotec, bottling plant maker Krones, Software AG and Shop Apotheke Europe in its MDAX midcap index.
Deutsche Börse announced that real estate group Aroundtown, telecom provider United Internet, wafer maker Siltronic and US telecom provider Adtran must step aside on June 19. As expected, there will be no change in the Frankfurt leading index DAX.