US reporting season ahead: DAX lurking before 15,800 mark
market report
Status: 04/14/2023 12:44 p.m
The DAX is stuck below the 15,800 point mark. Investors are now waiting for the balance sheets of large US banks and fresh economic data. If they do well, things could go further.
The DAX increased by around 0.4 percent to 15,785 points. Yesterday it closed 0.2 percent higher at 15,729 points. Experts believe further gains are likely. “If the DAX can continue to rise, an initial run-up to 15,800 points and then up to 16,000 points can be expected. Depending on the season, the DAX usually receives a further boost until the end of April/beginning of May before there is a correction,” write the experts at ING . The leading German index last exceeded the 16,000 point mark in January 2022.
“You don’t have to worry about a new drop to or even below the 15,000 mark at the moment, but you can still waste it on the 16,000 mark,” says the daily commentary of the HSBC experts, who argue technically. “If this is overcome for the first time since January 2022, the all-time high of 16,290 points will be on the bulls’ agenda – a massive resistance, mind you!”
US banks in focus
Whether things continue to progress depends essentially on two factors. For one thing, the US reporting season starts today. The focus is on the balance sheets of the major US banks JP Morgan, Wells Fargo and Citigroup, which are due this afternoon before the US stock market opens. Investors should look to see whether and to what extent the recent difficulties of US regional banks such as Silicon Valley Bank have also left their mark on the balance sheets of the large investment houses.
“If the balance sheets published today by the major US banks play along, the market could finally take the level into the weekend and thus send a strong signal for the coming stock exchange week,” says Konstantin Oldenburger, market analyst at CMC Markets.
US interest rate peak reached soon?
The US interest rate policy is the second key aspect for the current situation on the stock market. US March producer prices, which are seen as a precursor to inflation figures, rose at a much slower pace yesterday. This suggests that inflation will slow down. According to analysts, investors are hoping that the latest economic data will now encourage the US Federal Reserve to make smaller interest rate hikes. Expectations of a peak in monetary tightening are fueling optimism in trading this week, said Pierre Veyret, an analyst at broker ActivTrades.
That’s why US retail sales, US industrial production and the University of Michigan’s consumer confidence are still under observation today. It remains to be hoped that the US figures will not contribute to an increase in economic concerns, write the market observers at Helaba. “But even if that were to happen, interest rate concerns would tend to ease, which in turn would benefit the stock market.”
Euro increases
On hopes of a dovish US interest rate policy, the euro rises to $1.1075, its highest level in a year. In the view of Bundesbank President Joachim Nagel, the European Central Bank (ECB) must continue to raise interest rates in view of the high underlying inflationary pressure: “That means that from a monetary policy point of view there is still a way to go,” said Nagel.
In addition, the mood on the financial markets continues to be friendly. Against this backdrop, safe haven assets like the dollar are less in demand, which in turn gives the euro a further boost.
Oil price rise stopped?
Oil prices fall slightly around midday. In the past four weeks they had increased significantly. An important price driver on the oil market was the announced production cuts by numerous OPEC+ oil states.
The day before, OPEC had pointed out the consequences of OPEC+’s production policy in its monthly report and warned of a significant undersupply of the global oil markets by the end of the year. The future development of supply and demand remains a dominant topic in the oil market. The monthly report of the International Energy Agency (IEA) is expected during the course of the day, from which investors are hoping for new information.
Tesla continues to lower prices in Germany and Asia
The US electric car manufacturer Tesla has again reduced its prices and, according to experts, is putting pressure on the competition. According to Tesla’s website, the Model 3 is now available in Germany for 41,990 euros, 2,000 euros less than recently. The manufacturer reduced the prices for high-performance variants of the Model 3 and Model Y even more. “We are reducing prices in numerous European markets,” said Tesla. This affects all variants of the Model 3 and certain versions of the other Tesla models Y, S and X. The price reduction is possible thanks to increasing quantities, the carmaker added.
Hermès: jump in sales thanks to China
The sales of the French luxury group Hermès grew in the first quarter by almost a quarter to 3.38 billion euros, mainly thanks to high demand in China and Europe. Almost half of the annual turnover is attributable to the Asia region excluding Japan. In contrast to its rival LVMH, the luxury fashion manufacturer known for its Birkin bags, which cost thousands of euros, also sees growing demand for fashion and leather goods in the USA. Hermès raised prices by about 7 percent earlier in the year, which is above the usual annual increases of 2 to 3 percent.
Boeing stock under pressure
Boeing shares have come under selling pressure in US pre-market trading following new problems with the planemaker’s 737 Max medium-haul jet. Deliveries have to be curtailed due to manufacturing defects and necessary inspections.
According to the group, however, this is not an acute safety risk and the 737 Max fleet will not be affected during flight operations. However, the problem affects a “significant number” of machines that have not yet been handed over to customers and are still in production. The US Air Traffic Control Authority FAA has been informed.
Covestro delivers numbers
The plastics manufacturer Covestro sees its earnings for the first quarter above market expectations. The preliminary Ebitda amounts to 286 million euros and is thus above the company’s own forecast range of 100 to 150 million euros. The preliminary group result shows a loss of around 30 million euros, compared to average loss estimates of 77 million euros. The provisional turnover is 3.743 billion euros.
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