DAX lagging behind: no recovery after Easter

market report

Status: 04/19/2022 09:34

After the long Easter weekend, the DAX initially falls. Concerns about the economy in China and developments in Ukraine currently leave little room for risky investment strategies.

The DAX drops more than half a percent and sits below the 14,100 mark. Last Thursday, the index closed up 0.6% at 14,163 points.

“Importantly, the war in Ukraine and the ongoing lockdown measures in China continue to be the focus,” market watchers at ING wrote in a market commentary. From a technical point of view, they attach some importance to the 14,100 point mark: “If the DAX crosses here sustainably, one would initially expect a further decline in price to the round bar of 14,000 points .” Below 14,000 points, we would have a yield of up to 13,106 points in the long term, this is the thesis of the experts at ING.

The stimuli of the intercourse season could provide a boost, but in both directions. In the USA, companies are already presenting their balance sheets, and German groups will follow. According to analyst Tina Teng of broker CMC Markets, investors are now awaiting quarterly figures from major US technology groups. The Netflix streaming service kicks off today after the trading day, Wednesday, among other electric car maker Tesla will follow.

Economy update from 04/19/2022

Klaus-Rainer Jackisch, HR, April 19, 2022 10:13 a.m.

Virtually no movement on Wall Street

In the United States, trading resumed yesterday, and the markets as a whole were at a standstill: the Dow Jones fell 0.1% to 34,411 points. The S&P 500 barely budged at 4,391 points, the Nasdaq technology stock index lost 0.1% to 13,332 points. The situation hasn’t changed much thematically either: “The Fed’s monetary policy, very high energy costs and economic problems caused by the war in Ukraine will weigh on the markets in the coming weeks unless a solution is found. be found,” said partner Rick Meckler. to investment firm Cherry Lane Investments.

Meanwhile, US Federal Reserve banker James Bullard has again called for US interest rates to be raised to 3.5% by the end of the year to curb high inflation. But you can’t get there in one step, and hikes shouldn’t exceed 0.5 percentage points per step, the chairman of the St. Louis branch of the Fed said. The US economy will not go into recession and the unemployment rate, currently at 3.6%, is expected to fall below 3% this year.

Higher interest rates tend to be bad for the stock market because rising interest rates make bonds an alternative to stocks.

Asian Mixed Specs

There has been no clear trend in Asia: mixed economic data from China is affecting stock markets. The Shanghai Stock Exchange lost 0.6% to 3177 points. The Hong Kong leading index fell 2.5%. In China, the economy experienced surprisingly strong growth in the first quarter. However, due to the latest corona wave and the war in Ukraine, retail sales in March fell twice as much as expected to 3.5%, while unemployment at 5.8% was the highest in nearly two years.

The Japanese Nikkei index, on the other hand, rose 0.7% to 26,985 points on the back of higher chip prices.

Oil prices more or less stable

Oil prices tend to be slightly lower. In the morning, a barrel (159 liters) of Brent from the North Sea cost 113.06 dollars. It was 10 cents less than the day before. The price per barrel of West Texas Intermediate (WTI) fell 27 cents to $107.94.

In the oil market, investors continue to worry about Chinese demand. Lockdowns and other restrictions imposed by the strict zero-Covid strategy are slowing down the second largest economy. Investors are now hoping for economic support measures.

Financial investor Apollo plans to participate in a Twitter offer

According to a press report, the American financial investor Apollo could want to get involved in a takeover of the short message service Twitter. The company is considering backing either tech billionaire Elon Musk or another bidder with capital or credit in a bid, The Wall Street Journal (“WSJ”) reported, citing people familiar with the matter. The financial investor has also bet on a possible cooperation between its Internet service Yahoo and Twitter.

Bank of America earns less

After stellar business during the pandemic, Bank of America earned significantly less at the start of the year. In the first quarter, net profit fell about 12% year-on-year to $7.1 billion. However, the bank increased its total revenue by 2% to $23.2 billion. This was largely due to a strong consumer credit business.

Peloton wants to increase the number of customers with cheaper devices

The new management of sporting goods supplier Peloton is screwing up the business model after heavy losses. The price of the company’s exercise bikes and treadmills will be reduced in all markets. For example, the cheapest Peloton bike in Germany now costs 1445 euros, which is 300 euros less than before. In the US home market, customers would also pay $44 instead of the previous $39 for networking with online training hours. Prices for subscriptions abroad remain “currently” unchanged, while the range of content expands.

Peloton was one of the big winners at the start of the corona pandemic, but grossly overestimated growth prospects and entered a crisis.

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