A further dampener on many investors’ interest rate cut fantasies took away the strength of the Dax on Friday after another record high. At 17,004.55 points, the German leading index was just behind its previous record from December before surprisingly strong US labor market data slowed it down. A key interest rate cut by the US Federal Reserve in March is likely to be off the table in view of the data, said analyst Michael Hewson from broker CMC Markets UK.
The DAX ultimately closed at 16,918.21 points, 0.35 percent higher than the day before. There is a small minus for the week.
The MDax, however, fell by 0.97 percent to 25,651.30 points on Friday. The Eurozone leading index EuroStoxx rose by 0.3 percent. The stock markets in Paris and London went into the weekend little changed.
Initially, strong specifications from the US stock exchanges provided a tailwind after the technology giants Amazon and Meta shone with current business figures. The tech-heavy Nasdaq 100 was approaching its record high, driven by a price jump of a fifth for Facebook parent Meta and a price increase of a good seven percent for Amazon. The US leading index Dow Jones was slightly up at the close of trading in Europe.
The US economy created significantly more jobs than expected in January and hourly wages rose twice as much as experts predicted. “Against this background, the probability that the US Federal Reserve will initiate a change in key interest rates at its next meeting in March is decreasing to zero,” believes analyst Elmar Völker from the Landesbank Baden-Württemberg.
A strong labor market with significant upward wage pressure increases inflation risks. In order to prevent price developments from picking up again, the Fed is likely to keep the key interest rate high for longer.
From an industry perspective, auto stocks that continued their recent recovery were in demand. The shares of the sports car manufacturer Porsche AG led the DAX with an increase of a good 4 percent. Things also went up for BMW, Mercedes-Benz and Volkswagen, although not quite as strongly. Deutsche Bank’s shares continued their strong previous day with an increase of 3.5 percent – the business figures for 2023 and the company’s goals once again provided tailwind.
Bringing up the rear in the Dax were Siemens Healthineers, which gave up a large part of its previous day’s profits at minus 3 percent. Second to last were the Eon shares. They fell by almost three percent after the publication of key data for 2023. The energy company had performed better than expected, but according to analysts this was not particularly surprising.
The biggest loser in the three larger DAX indices – DAX, MDax and SDax – was Delivery Hero shares. After a newspaper report, doubts arose in the market as to whether the planned sale of activities in Southeast Asia would take place. The share price fell by almost 23 percent.
The euro exchange rate fell after the US labor market data and was last quoted at 1.0785 US dollars. The European Central Bank (ECB) had set the reference rate at 1.0883 (Thursday: 1.0814) dollars. The dollar therefore cost 0.9188 (0.9247) euros.
On the bond market, the current yield on German federal bonds fell from 2.21 percent the day before to 2.19 percent. The Rex bond index rose by 0.03 percent to 126.40 points. The Bund future lost 0.72 percent to 134.93 points.
