Uninterrupted surge of achievements for Dax following brief pause.
Blast off! The DAX's electrifying rally has taken off once again after a brief breather. last Friday, it peaked at an astounding 20,521.78 points, but a bit of profit-taking later set it back below the 20,500 mark. Nonetheless, it managed to end the day with a slight 0.3% gain at 20,480 points compared to the previous day. This new record high was set earlier in the week.
Anticipation of Fed Cut
Over the next week, the market's pulse quickens with expectations of another interest rate cut by the Federal Reserve. This decision follows in the footsteps of the ECB's rate cut. Surprisingly, most Asian markets, along with American counterparts, struggled the day prior.
Munich on a High
The DAX's standout star was Munich Re, skyrocketing 5.5% to reach 517.40 euros, marking a new record high of 519.80 euros. The reinsurer has provided a promising outlook for the upcoming year, predicting a net profit of 6 billion euros, up from over 5 billion euros in the current year. They also anticipate boosting their capital investment return to over 3%. Every single business segment is expected to keep thriving.
TeamViewer Takes a Dive
On the flip side, TeamViewer plummeted by 5.7% to 10.51 euros. Market watchers pointed to analysts at private bank Berenberg withdrawing their buy recommendation. This decision came due to concerns about the planned acquisition of software company 1E, with worries of overspending and a need for more information about potential synergies.
Cewe's Share Climb
Cewe's shares experienced a 2.6% surge to 103.60 euros. Analysts at Oddo BHF initiated coverage of the stock, awarding it an "outperform" rating and setting a price target of 145 euros.
Dollar's Dominant Week
On the foreign exchange market, the dollar reigned supreme, marking its best week in a month. The dollar index, which measures the U.S. currency's value against the currencies of its six major trading partners, surged 1.1% compared to the previous Friday. This can be attributed to the Fed's upcoming meeting next week. At midday, the euro saw a slight 0.2% rise to 1.0490 dollars, and against the Japanese yen, the dollar rose by 0.5% to 153.50 yen. Bitcoin was trading at a impressive 100,445 dollars on Friday afternoon, up 0.7%.
Intriguing Factors Fueling the DAX Rally- Easing trade tensions, particularly between the US and China, fuel the DAX rally as Germany's economy heavily depends on exports and international trade.- Domestic economic policies in Germany, such as the new coalition government's plans to stimulate growth through increased defense spending and infrastructure modernization, generate optimism about future economic performance.- Monetary policy adjustments, like potential Fed rate cuts and looser European Central Bank (ECB) policy, create a more favorable investor sentiment and market conditions, indirectly supporting the DAX.
Industry and finance sectors are closely watching the anticipated Federal Reserve's interest rate cut next week, mirroring the ECB's recent move.
In the business world, Munich Re, a leading reinsurer, saw a significant 5.5% increase in its shares, reaching a new high of 519.80 euros.
