Dusseldorf Earlier in the week, the Dax slipped back below the 14,000 point mark. The Dax closed on Monday with a drop of 1.1% to 13,939 points.
There was an interesting trading course: After a reasonably stable start, the Dax dropped significantly to 13,778 points in the morning. But just as quickly, the bargain hunters jumped into action again and brought the main index back to 14,000 points.
The EuroStoxx50 and the broad Stoxx600 each slipped by three percent, but were also able to cut losses afterwards. The same goes for the main Stockholm index, which has dropped 8% at times. There, too, the specter ended quickly.
The sell-off does not appear to be due to a specific stock, said Martin Munk, an equities expert at Jyske Bank. “An investor must have taken the stock market adage ‘Sell in May and leave’ too literally,” joked one stock trader. Another stock trader exploited a cascade of automated sales.
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Trading on Monday shows that the recovery phases in the Dax do not last long. Or as Robert Halver, a capital market expert at Baader Bank puts it: “The stock market bull is on a sabbatical.”
In light of economic skepticism and upcoming interest rate hikes by central banks, only a few investors would seemingly be willing to buy shares out of long-term conviction. This is understandable, as can be seen from the data from the US company Caterpillar. The world’s largest construction equipment manufacturer is a good leading economic indicator and recently reported weaker sales development than the previous year.
It is therefore worthwhile for medium-term investors to continue to observe chart and market patterns and trends. They have already provided good guidance in the past few weeks.
In the medium term, the following still applies: Only with sustainable prices above 15,000 points is there a chance of a reasonably good year on the stock market. The downtrend line from the annual high of 16,285 points on January 5 would have been broken at around 14,300 points.
The stock market month of April calmed the situation
A look at the long-term trend using the monthly charts shows that the situation on the German stock market calmed down in April. The range for the last month has been within the highs and lows of March.
The price rises to the European stock exchanges
As a result, prices above 14,603 points, last month’s high, and below 13,566 points, the April low, would signal a relaxation or renewed downward momentum.
Investor sentiment supports the market
The extremely pessimistic mood among investors, which has long been extremely pessimistic, is currently having a supportive effect on the price. In the US, the number of bulls expecting a price hike is at an all-time low. And investor sentiment in Handelsblatt’s Dax-Sentiment survey has been negative for 17 weeks, the highest since the survey began.
These are contraindicators. The reasoning behind this is that if investors are pessimistic, most of them have not invested. So only a few can sell and thus depress courses.
“The fact that investors have already positioned themselves accordingly in anticipation of falling prices contrasts with a dramatic sell-off of panic and massive setbacks,” agrees Robert Halver. “Conversely, with sustained positive impulses, skepticism can quickly turn into a willingness to buy, which is not predictable in the short term.”
Look at the individual values
Adler Group: Investors are punishing the real estate group for billions in losses and a consolidated balance sheet without a seal of approval: the share of publicly traded SDax has dropped by more than 40 percent at times. At the end of trading, it was 29% lower at EUR 5.12.
The stock could soon be excluded from the small caps index, at least temporarily. After the bankruptcy of Wirecard, stricter rules were applied to members of the Dax indexes. The audited annual results must be published within 90 days of the end of the financial year. Although the term can be extended up to four months, this period also expires at midnight for the Adler Group.
German bank: American voting rights consultant Glass Lewis is harshly criticizing Deutsche Bank’s board member compensation system. Glass Lewis advised shareholders to vote against the clearing scheme at the AGM on May 19. The stock recovered its slight losses and ended up gaining 0.4%.
Wind energy values: Vestas lost nearly 8% in Copenhagen. The wind turbine builder posted a surprisingly high quarterly operating loss of 329 million euros and warned of a negative margin of minus five percent for the full year. The only ray of hope is the order backlog and higher prices for new orders, said analyst Per Hansen of financial services provider Nordnet. In the wake of Vestas, the shares of Nordex and Siemens Gamesa fell as much as 5%.
PVA heat: An order from chip company STMicro to supply crystal growing systems initially encouraged investors to invest in TePla PVA. Shares of the tech company then turned negative and lost 2% at the end of the negotiations.
Here you can go to the page with the Dax course, here you can find the current highs and flops in the Dax.