Market report: week to tick off in the DAX

The DAX failed again at the 16,000 point mark. The bottom line for this stock market week is a slight price minus. Meanwhile, Tesla and Adobe are keeping Wall Street in a good mood.

A rather unspectacular week on the stock market is coming to an end. In view of the forthcoming central bank decisions, investors held back significantly and reduced their risk. The DAX said goodbye to XETRA trading with a minus of 0.3 percent to 15,950 points. The bottom line is that the German stock exchange barometer lost 0.6 percent this week.

Events on the German stock market have recently been characterized by a pronounced lack of movement. There were just around two hundred points between the weekly high (16,115) and low (15,910). The oscillation around 16,000 points in the DAX continued in this trading week. A week ago, the leading German index closed above the round mark at 16,051 points.

At the end of the week, things are a little more dynamic on the US stock exchanges. After recovering from the previous day, the tech-heavy Nasdaq 100 is temporarily up over a percent in early trading. The market-wide S&P 500, which is also peppered with many tech stocks, has reached another high since August 2022. The gains in the standard stocks in the leading index Dow Jones Industrial are somewhat more restrained.

Tesla shares are up over 5 percent in early Nasdaq trade, their highest since October. The e-vehicle manufacturer is now also opening up its supercharger charging network to electric cars from rival General Motors (GM). Starting next year, GM customers will have access to around 12,000 Tesla charging stations. Tesla’s charging technology is becoming more and more popular. The partnership with Tesla is also well received by GM investors.

The shares of the software group Adobe, which had also done well the day before, rose again in early Wall Street trading and rose to their highest level since April 2022. The topic of artificial intelligence continues to provide imagination. In addition, Bank Wells Fargo upgraded the shares to “Overweight” with a price target increased from $420 to $525.

Investors on both sides of the Atlantic are already looking ahead to next week, when the meetings of the ECB and the Federal Reserve will have two high-profile central bank decisions on the stock exchange agenda. The US Federal Reserve will decide on its key interest rate on Wednesday, followed by the European monetary authorities on Thursday. While investors at the ECB are firmly expecting a further interest rate hike of 0.25 percentage points, there is a lot to be said for a rate pause at the Fed.

Data from the labor market published yesterday, for example, indicated a cooling off. According to the Fed Watch Tool, 76 percent of market participants are currently anticipating an interest rate pause; only 24 percent are betting on another small interest rate step.

The recently increased US interest rate speculation has thus subsided significantly. However, a further rate hike by the Fed cannot be completely ruled out; This week, both the Australian and Canadian central banks caught investors flat-footed with surprise rate hikes.

This US central bank decision will also be particularly exciting because fresh inflation data will only come out the day before. These are likely to have a significant influence on the decision-making process of monetary authorities around Fed Chair Jerome Powell.

The Turkish lira has halted its slide after hitting new record lows against the euro and dollar in early trade. Speculations about an end to the support purchases by the Turkish central bank had recently weighed heavily on the currency. Meanwhile, Turkish President Recep Tayyip Erdogan Hafize Gaye Erkan, a financial manager from the United States, was appointed head of the Central Bank of Turkey.

The euro has extended its exchange rate losses against the dollar, weak economic data from Italy are putting the European common currency under pressure. At the low, 1.0749 dollars are paid for one euro. An ounce of gold currently costs $1961.

Chemical stocks suffered at the end of the week from a profit warning from the British specialty chemicals group Croda. The biggest DAX losers were Brenntag stocks with a loss of 4.4 percent, closely followed by Symrise. But shares in BASF, Bayer, Evonik, K+S and Wacker Chemie were also affected.

According to insiders, the industrial group Thyssenkrupp wants to launch the partial IPO of the hydrogen subsidiary Nucera, which has been planned for a long time. The “Intention to Float” declaration could be made as early as next week, several people familiar with the matter told Reuters.

Auto1 stocks continued to benefit from a strong outlook from US peer Carvan. After a price increase of two percent yesterday, the shares of the German car dealer listed in the SDAX gained 6.1 percent at the end of the week.

The papers of the shop pharmacy fell by 8.3 percent after a downgrade by the British bank HSBC, at times they lost almost 16 percent. According to analyst Christopher Johnen, the valuation gap between the German mail-order pharmacy and its Swiss competitor DocMorris has reached “extreme proportions”. The market is too negative for DocMorris and too optimistic for the shop pharmacy.

According to media reports, the Facebook group Meta is making progress with the development of its Twitter competitor offer and wants to bring it to the public as soon as possible. Top manager Chris Cox demonstrated an early version of the app to employees at a company-wide launch, as reported by the technology blog “The Verge” and the “Wall Street Journal”.

Netflix stock is benefiting from the surge in subscription numbers following new measures against password sharing. The titles of the US streaming group have risen to their highest level in a year and a half. As of May 23, Netflix is ​​requiring subscribers to register additional members when sharing their accounts with others outside of their household. On the four days that followed, Netflix recorded its largest daily user growth since surveys began four and a half years ago, according to data from analytics company Antenna.

In the conflict between IG Metall and the wind turbine manufacturer Vestas over a collective agreement, which has been smoldering since November 2022, the employees are going on their 100th day of strike tomorrow. Then the service employees of the Danish wind turbine manufacturer, who are distributed throughout Germany, will join together in a digital strike meeting, as on the other strike days.

The shares of the Italian crisis bank Monte dei Paschi di Siena are under pressure at the end of the week on the Milan stock exchange. Rival BPER Banca had previously rejected a possible merger with Monte dei Paschi.

Shortly before completing the takeover of its competitor Credit Suisse, the major Swiss bank UBS reached an agreement with the government on the details of a loss guarantee. The contract was signed today with the Federal Department of Finance. As announced in March, the guarantee is limited to nine billion francs. In addition, the federal government obtained assurances that the bank would retain its headquarters in Switzerland. The CS takeover is expected to be completed next Monday.