Financial Streetbeat: Stalemate on DAX, Crypto Soars, Oil Dips
Thyssenkrupp Nucera Faces Commission's Investigation
Hey there! Let's dive into the happenings in the financial world.
The DAX, Germany's leading stock market index, failed to make any significant moves on Tuesday. Closing at 20,246 points, the index dropped 0.3%. A mixed bag of economic signals from ZEW and Ifo, combined with investor reluctance ahead of the Fed's interest rate meeting, kept the market in check. However, the all-time high of 20,522 points, set just last Friday, still remains within reach.
Two major economic indicators for Germany painted contrasting pictures on Tuesday. The Ifo business climate index sank to its lowest level since May 2020 following a sixth consecutive decline. Meanwhile, the ZEW economic expectations surprisingly improved. According to VP Bank's chief economist, Thomas Gitzel, while the Ifo business climate index dampened hopes for a swift economic recovery next year, the ZEW economic expectations still offered a glimmer of hope.
Airbus shares were among the winners in the DAX after Deutsche Bank upgraded them to "Buy". In stark contrast, shares of Rheinmetall, the defense company, continued to underperform, struggling even two weeks after setting a new record high. DHL Group, however, faced a setback as a trader attributing the decline to a weakening consumer sentiment on the home market. The stock has already lost over 20% this year and is among the biggest losers in the DAX.
The star performer in the MDax was Jenoptik, which saw a gain of up to 5% after UBS upgraded the Thuringian company's stock to "Buy", praising it as a technology leader with underestimated potential. Jungheinrich also saw a boost, benefiting from a buy recommendation by Citigroup.
Thyssenkrupp Nucera witnessed significant price swings in the SDax, with shares surging up to 16%, marking their highest daily gain in a year. The company's operating margin exceeded expectations, even though it remains non-profit. Analyst Michele della Vigna of Goldman Sachs noted the company's optimism about the outlook for green hydrogen production.
The crypto currency market continues to surge, with no signs of slowing down. As of now, Bitcoin trades at $107,138, just below its record high from Monday. Experts predict Bitcoin to surpass the $110,000 mark soon due to expectations of deregulation and the possibility of a state Bitcoin reserve being established by the incoming US President, Donald Trump.
On a less optimistic note, the oil market faces a gloomier forecast. The International Energy Agency predicts a supply surplus of 950,000 barrels per day in 2025 due to increasing production in countries like the US and Brazil. Simultaneously, China, the top oil consumer, is expected to see decreasing demand due to an economic slowdown. The Brent crude oil price dropped by 0.6% to $73.48 per barrel.
The Indian Rupee sank to its lowest level against the dollar on the currency market, depreciating to 84.93 rupees per dollar. Concerns about India's widening trade deficit are weighing on the market. Meanwhile, the Canadian dollar plummeted to its lowest level since 2022 against the US dollar due to fears among market participants.
Airbus shares experienced a positive momentum after Deutsche Bank upgraded them to "Buy", signaling a potential investment in the aviation industry. On the other hand, DHL Group faced a setback, with their shares declining due to a weakening consumer sentiment on the home market.
In the industry of finance and technology, Jenoptik and Jungheinrich saw an upward trend after UBS and Citigroup, respectively, upgraded their stocks and recognized their potential as technology leaders.
Contrasting pictures emerged from two major economic indicators for Germany. While the Ifo business climate index experienced a sixth consecutive decline, the ZEW economic expectations surprisingly improved. According to VP Bank's chief economist, Thomas Gitzel, this contradiction implies a cautiously optimistic outlook for the German and broader European economy.
Looking ahead to 2025, the oil market faces a potential supply surplus of 950,000 barrels per day, primarily driven by increased production in countries like the US and Brazil. This surplus could lead to a dip in the Brent crude oil price.
The crypto currency market continues to skyrocket, with Bitcoin trading at $107,138, closely approaching its record high. Experts anticipate Bitcoin to surpass the $110,000 mark soon, driven by expectations of deregulation and the possibility of a state Bitcoin reserve being established by the incoming US President, Donald Trump.
