Frankfurt (Reuters) – The prospect of a longer stalemate in the US debt dispute and disappointing economic data from China made Dax investors unwilling to trade on Tuesday.
The leading German index was slightly up at 15,945 points, and the EuroStoxx50 also made only minimal progress. “As long as the dispute over the raising of the debt ceiling is not settled and there is a risk of default by the USA at the beginning of June, an upward liberation will be difficult,” predicted the analysts at Helaba. In the US, futures signaled a somewhat weaker start to trading.
According to Treasury Secretary Janet Yellen, the United States is running out of time in the dispute over raising the debt ceiling. Every day that Congress doesn’t act, there are more economic costs, she said. The US economy is at stake: “There is no time to lose.” In the course of the day, negotiations between the leading representatives of the Republicans and the Democrats with US President Joe Biden should be resumed. The dollar hardly moved, the dollar index remained just below the previous day’s level. According to analysts, the US currency benefited from the debt dispute because many investors sought their salvation in safe havens – one of which is the dollar. “The market had been expecting a rate cut in the US but the data isn’t supporting it and there is a need for safe havens,” said Jane Foley, chief strategist at Rabobank. “With all that, do you really want to take a big risk this year?”
CHINA DATA BEARS CAR VALUES
The fact that both industrial growth and consumption in China fell short of forecasts in April caused disillusionment among Dax investors. The data suggested the Chinese economy’s recovery was losing steam, said Commerzbank analyst Tommy Wu. The concerns about the economy were felt primarily by car stocks. The European car index fell by 1.3 percent at times. In the Dax, Volkswagen, Porsche SE and Mercedes-Benz lost between 2.3 and 1.5 percent. The industrial metal copper fell 2.1 percent to $ 8,096 per ton.
The stock market professionals also see difficult times ahead for Germany. The ZEW barometer for assessing the economy in the coming six months fell by 14.8 to minus 10.7 points in May. This means that the value is negative again for the first time since December 2022. Economists surveyed by the Reuters news agency had only expected a drop to minus 5.3 points. NordLB analyst Bernd Krampen found that there was no sign of economic euphoria among the financial market experts surveyed. “Massive interest rate hikes, more restrictive bank lending, a drop in credit demand and persistently high inflation are dampening sentiment.” The International Monetary Fund only expects low growth rates in Germany for years to come. The aging population, lack of productivity gains and bottlenecks on the labor market would have a negative impact.
VODAFONE UNDER PRESSURE BY NUMBERS
Among the individual values, the papers from Siemens Energy were at the top of the Dax after a price target increase by Morgan Stanley with an increase of 3.8 percent to 23.81 euros at times. In the SDax, the papers of the fuel cell experts SFC Energy jumped by up to 11.7 percent. The supplier of hydrogen and methanol fuel cells recorded a leap in growth at the beginning of the year. On the other hand, Hornbach’s shares plummeted after the company’s figures were published. Despite the ongoing boom in DIY, earnings collapsed in the past 2022/23 financial year. They fell by 12.3 percent at the top and fell to their lowest level in half a year.
Vodafone investors withdrew from the London Stock Exchange. The share temporarily lost 7.7 percent to 83.13 pence and thus the lowest value since October 2002. Due to gloomy business prospects, the new CEO Magherita Della Valle Vodafone has prescribed a drastic cure. In the next three years, 11,000 jobs are to be cut worldwide and the group streamlined.
(Report by: Daniela Pegna and Christina Amann, edited by Christian Rüttger. If you have any questions, please contact our editorial team at [email protected] (for politics and the economy) or [email protected] (for companies and markets).)