Market report: DAX climbs above the 16,000 mark

At the end of the week, investors are becoming more optimistic again. At the start of trading, the DAX was just above the 16,000 point mark. Should he jump over it sustainably, further price gains would be possible.

The DAX increased by 0.4 percent to 16,010 points in early trading, but the momentum already seems to be running out again. Thomas Altmann, portfolio manager at asset manager QC Partners, urges caution. At the moment there is a lack of confidence that sustainable price gains can still be achieved above 16,000 points.

“In addition, there is the fear of a possible upcoming seasonal summer weakness,” emphasized Altmann. Yesterday the leading German index was practically on the spot and had closed at 15,947 points.

Investor reluctance is related to consumer prices: Inflation in Germany, which rose again in June had made investors cautious. On the part of the import prices for the month of May, however, there was a sign of relaxation today. They fell by 9.1 percent compared to the same month last year, according to the Federal Statistical Office. This is the sharpest decline since September 2009.

However, there was a statistical base effect: Because prices had risen particularly sharply in the previous year, the comparison with the high price level at the time is low. Import prices also tend to influence consumer prices, on which the European Central Bank (ECB) bases its monetary policy.

The inflation issue remains relevant today as investors await the US Personal Consumable Expenditure (PCE) Index, which is due out at 2:30pm today. It is the US Federal Reserve’s preferred indicator of inflation. Experts expect the core inflation rate to remain unchanged year-on-year at 4.7 percent. Before that, the consumer prices for the euro zone for the month of June will be published.

While the German economy has concerns about growth, the picture is different in the USA: the economy there grew more strongly in the first quarter than previously assumed. Gross domestic product grew at an annualized rate of 2.0 percent. So far, there was only talk of an increase of 1.3 percent.

However, this news is not only welcome to investors on the stock market: The strong US economic growth in the first quarter underpinned recent comments by leading central bankers that further interest rate hikes against high inflation were necessary, according to Commerzbank.

Positive results from the annual US bank stress test and the strong US economy pushed Wall Street into positive territory yesterday. The Dow Jones was up 0.7 percent on Thursday at 34,103 points. The S&P 500 advanced 0.3 percent to 4392 points. The index of the technology exchange Nasdaq took a breather after the recent strong price increases and fell 0.1 percent to 13,580 places.

In addition to the data on core inflation, consumer spending and consumer confidence from the University of Michigan are also on the agenda in the USA.

Japanese stocks slump on worries of further US Federal Reserve rate hikes. The Japanese Nikkei index, which comprises 225 values, was 0.1 percent lower at 33,189 points on Friday. The broader Topix index fell 0.3 percent to 2,289 points.

Hopes for government economic aid, on the other hand, pushed the Chinese stock markets into the plus. The Shanghai Stock Exchange gained 0.7 percent. The index of major companies in Shanghai and Shenzhen gained 0.6 percent. Meanwhile, manufacturing activity in China in June fell for the third straight month. This fueled hopes for help from the Chinese government.

Nike, Adidas’ biggest rival, exceeded its own growth expectations and analysts’ forecasts in the fourth quarter of fiscal year 2022/23 thanks to the strong recovery of its China business. Sales from March to the end of May were $12.8 billion worldwide, up five percent year-on-year. But traders said Nike’s outlook was bleak, focusing on the slowdown in the North American market and overshadowing the strong recovery in China.

According to the Facebook parent company Meta, Google in Canada also no longer wants to link content from local media to its platform. The US online group reacted to a law that obliges online companies to pay Canadian media for their content. The law is “unenforceable,” Google said.

The so-called online news law came into force last week and is intended to support Canada’s ailing media sector. It urges major internet companies to sign agreements with local media to provide them with fair payment for the use of their content. Otherwise, the payment should be officially determined

The US investor Silver Lake has secured a majority stake in Darmstadt-based Software AG with its takeover bid. Silver Lake announced that more than 63 percent of the shares had been tendered. More papers can probably be offered until July 17th. Silver Lake confirmed that it does not want to enter into a domination and/or profit and loss transfer agreement. However, Software AG, which is listed on the MDAX, is to be taken off the stock exchange as soon as possible.