market report
DAX continued its recovery movement in the middle of the week. The price driver comes from expectations of new interest rates. Peace efforts in the Ukraine war also inspire confidence.
“Don’t fight the Fed” – this tried and tested stock market rule, which states that you should not fight the market’s key interest rate expectations, also applies in the middle of the week. With renewed hopes that the US Federal Reserve will cut interest rates again in December, the DAX is further away from its lows from the recent slump.
Last Friday, Germany’s main index hit its latest low of 22,943 points. Germany’s main index is currently up 0.6 percent to 23,609 points. Yesterday DAX strengthened 1.0 percent.
After the previous week’s price decline, the technical outlook for the German stock market also brightened significantly again. By reclaiming the key zone of the 200-day line, which is important for the long-term trend (currently at 23,477 points) and the upper limit of the downward price gap from last week (23,530 points), the DAX is sending a clear positive signal.
The New York stock exchange also started the trading day with confidence. The Dow Jones index started up nearly half a percent, while the Nasdaq 100 technology index initially rose 0.7 percent.
Today’s US economic data did not reduce hopes of an interest rate cut. Orders for durable goods – from household appliances to aircraft – surprisingly increased significantly in September by 0.5 percent compared to the previous month. Initial applications for jobless aid also did not rise as sharply as expected last week. There were 216,000 new applications reported here, 9,000 fewer than economists expected and 6,000 fewer than the previous week.
Earlier weaker economic data again fueled interest rate hopes. Retail sales and consumer confidence data were weaker than expected.
According to CME Group’s Fed Watch Tool, nearly 83 percent of market players now expect a 0.25 percentage point rate cut at the next US Federal Reserve meeting on December 10. For comparison: a week ago it was only 50 percent.
The euro benefits from a weakening dollar
Rising expectations of a US rate cut weakened the dollar – at the same time, the euro continued its recovery with a slight increase. The European common currency was worth $1.1570 in the afternoon, after slipping below the $1.15 mark on Friday.
As time goes by, the Fed’s economic report, Beige Book, can provide stimulus.
Oil prices continue to fall after stabilizing for a while. A barrel (159 litres) of North Sea Brent is currently priced at $61.62, about 0.5 percent lower than yesterday. On Tuesday, signs of a possible peace plan between Ukraine and Russia pushed oil prices to their lowest level in five weeks.
Given new interest rate expectations, banks are in focus on the DAX. The strongest DAX stock was Commerzbank with a gain of more than four percent.
According to market researchers’ calculations, Apple will displace Samsung from the top position in smartphone sales this year. The US company will sell about ten percent more iPhones, while longtime market leader South Korea will see an increase of 4.6 percent, predicts analytics firm Counterpoint.
Computer company HP wants to save up to 6,000 jobs through greater use of artificial intelligence. The industry pioneer said job cuts must be completed in less than three years. The measures will initially cost about $650 million.
The increasing need for AI servers has given Dell its best quarterly results in the company’s history. Net income rose 17 percent to $2.59 per share. The computer maker then raised its targets for the 2025/26 financial year on Tuesday for the second time in just a few months.
