Frankfurt am Main – As the old stock market adage goes: sell in May and walk away … This now applies to June …
On Thursday, the Dax extended the previous day’s losses and tested the 13,000 points multiple times. Some relaxation came in the trading rooms at times, as signals pointed to a surprisingly favorable start on Wall Street. However, US futures rebounded rapidly, although they continue to indicate bullish gains.
Investors, on the whole, remain remarkably nervous as the signs of a recession increase. The statements made the day before by the head of the US Federal Reserve Bank, Jerome Powell, continued to have an effect, and the increasingly gloomy corporate mood in the euro area did the rest.
In the afternoon, the leading index lost 0.67 percent, 13,056.62 points, after falling temporarily to its lowest level since March of just under 12,940 points.
The eurozone’s main index, the EuroStoxx 50, has even recovered almost entirely from its first losses.
The MDax, the index of medium-sized stocks in Germany, recently fell by 2.08% to 26,680.12 points.
In his speech before the US Senate Banking Committee on Wednesday, Powell did not rule out a recession due to rising interest rates. A so-called “soft landing”, ie getting out of the situation without major upheavals, is a challenge.
Sentiment data from euro-region companies also weighed on investor sentiment late Thursday morning. S&P Global’s Purchasing Managers Index (formerly IHS Markit) fell to its lowest level in nearly a year and a half in June and even more than analysts expected. “The data is disappointing across the board and the unfavorable framework conditions due to high prices, especially for commodities and intermediates, as well as supply bottlenecks, staff shortages and rising interest rates are clouding the outlook more clearly. than before, “commented Helaba analyst Ralf Runde.
Ahead of the individual values on the German market, Deutsche Bank shares in the Dax fell 6.6 percent. In MDax, Commerzbank lost 6.3%. Concern that, in the event of a recession, loans may not be repayable.
Utilities took the top spot: RWE and Eon each increased by about 1.5%. The federal government has announced the second alarm level of the three-stage gas emergency plan. Barclays analyst Peter Crampton therefore sees his positive assessment of RWE once again supported. This should somewhat ease the pressure on the large gas companies and higher costs could be passed on.
For the rest, the focus was mainly on reclassifications – and these related to second and third tier companies. Aroundtown was downgraded to “underweight” by JPMorgan, which temporarily catapulted its stake in the MDax fund with a discount of more than ten percent. Most recently, it gave up 8.2%. Analyst Tim Leckie believes market expectations are overly optimistic, especially if the economy continues to deteriorate.
Vantage Towers fell 3.3%. The optimism of the US bank Morgan Stanley on the shares of the subsidiary Vodafone transmission tower has yielded. An analyst downgraded the stock to “equal weight” and lowered the target price from 38 to 32 euros. However, the share would still offer upside potential of around 20%.
Experts were more cautious on Rheinmetall, which fell 2.4%. Among other things, it canceled its buy recommendation for valuation reasons. It raised its price target from € 220 to € 240 and referred to its high growth expectations for the armaments division of the group. However, he is skeptical of the automotive supplies division.
Salzgitter’s shares in SDax lost another moderate 0.2% after an 11% price plunge the day before. US bank Morgan Stanley has now brought the steelmaker’s shares to “equal weight”. Salzgitter raised his forecasts yesterday afternoon, but the downgrade of US bank JPMorgan’s stock and its critical view of the outlook for the entire European steel industry had already scared investors.
The euro was trading at $ 1.0507 in the early afternoon. The European Central Bank set the euro benchmark rate at $ 1.0521 on Wednesday. On the bond market, the current yield fell from 1.60 percent the previous day to 1.36 percent. The Rex pension index rose 1.16% to 133.05 points. Bund futures rose a strong 1.63% to 147.53 points.