Tech giants and interest rate fantasies
DAX is tipping towards the next record high
February 2, 2024, 1:37 p.m
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The German leading index DAX shifts its all-time high in a homeopathic dose. After good numbers from the US tech giants, the mood is good. There is also a strong assumption that the US Federal Reserve could cut interest rates in the foreseeable future.
Strong balance sheets from US tech giants Amazon and Meta have pushed the DAX to a record high. The leading German index gained 0.9 percent to 17,003.54 points by midday. “The upward trend that started at the beginning of November last year is continuing impressively this year,” said Jochen Stanzl from CMC Markets. The DAX most recently reached an all-time high of 17,003.28 points in mid-December. The German leading index was additionally supported by ongoing speculation about the first interest rate cuts by the US Federal Reserve and the European Central Bank in the coming months.
On the German stock market, the price gains at Mercedes-Benz lifted sentiment in the auto sector. Porsche’s shares rose by more than five percent, making them one of the biggest winners in the DAX. BMW and Volkswagen were almost two percent higher. Mercedes-Benz pleased investors with higher cash inflows. Mercedes-Benz securities rose in price by around three percent. Free cash flow is enjoying increasing attention on the capital market because it is less distorted by accounting rules than the result.
Eon However, he was unable to convince investors with his preliminary figures. Shares gave up their initial gains and traded weaker. The energy company reported a higher-than-expected profit, but did not comment on the outlook for 2024. Perhaps that makes some investors skeptical, said a trader.
Investors also hit the sell button Delivery Hero. The food supplier’s shares fell by more than 13 percent in the MDax to a record low of 18.62 euros. Delivery Hero will have to look for another buyer for parts of its Southeast Asia business, according to a newspaper report. Talks with rival Grab broke down because of different price expectations, wrote the “Business Times” from Singapore.
However, the company denied the report: Rumors that negotiations over a possible sale of the Foodpanda-branded business in markets such as Singapore, Malaysia, Philippines, Thailand, Cambodia, Myanmar and Laos had failed were false, it said Food delivery service. “We confirm that negotiations regarding the potential sale are ongoing.” The Berlin company did not say who it was negotiating with.
In addition to the numerous balance sheets, the US Federal Reserve’s interest rate policy also remained a topic of discussion on the stock market. Investors were hoping for new information on the timing of the Fed’s first interest rate cut from the US labor market report in the afternoon. Analysts expect slightly fewer new jobs created in the USA compared to December.
“A slight slowdown in the labor market would certainly be positive for the stock markets, as it would preserve the chance of interest rate cuts soon,” predicted Thomas Altmann from QC Partners. The US Federal Reserve, which wants to curb inflation and cool down the hot labor market, has recently held still several times after an aggressive series of interest rate increases. Investors on the financial markets are longing for a reduction in interest rates, but this will probably take at least a few months to come.