Interest rate expectations live on
DAX effortlessly reaches new record high
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And once again the DAX has reached a new record high. Expectations of falling interest rates in the Eurozone and the USA continue to dominate the stock market. ECB President Lagarde is also encouraging about inflation trends.
A bombshell at the start of trading on the Frankfurt Stock Exchange: The DAX has reached a new all-time high. The leading index shot up to 17,089.02 points. The previous mark was 17,049.52. Interest rate expectations have been dampened compared to recent weeks, but have by no means disappeared, wrote analysts at Helaba in a commentary. Recently, the slow-releasing US inflation pressure had fueled doubts about an imminent turnaround in interest rates. Speculation about falling interest rates in the USA and the eurozone has been driving the leading index ever higher for weeks.
Shareholders also acknowledged comments by ECB President Christine Lagarde. She said the latest economic data indicated that inflation in the eurozone was returning to the central bank's two percent target. But before monetary authorities could be certain, they needed more data, the Frenchwoman told the Economic and Monetary Affairs Committee of the EU Parliament in Brussels. “The current disinflation process is likely to continue, but the ECB Governing Council must be confident that it will lead us sustainably to our two percent target,” she said. The ECB will continue to use data to determine the appropriate level and duration of the restrictive course.
Commerzbank shares were among the biggest winners in the first few minutes, rising 3.5 percent. The financial institution plans to pay out a higher dividend in 2023 following a jump in profits. On Thursday, the bank forecast a consolidated result for 2024 that would be higher than in 2023.
On the other hand, Airbus saw its share price fall by as much as 1.7 percent. Adjusted earnings before interest and taxes (EBIT) rose by four percent to 5.8 billion euros in 2023, but narrowly missed the target of six billion because Airbus recorded a further 200 million euros in special charges in the space division in the fourth quarter.
Overall, investors on Europe's stock exchanges started the trading day in a good mood. What is particularly encouraging is how quickly the US stock markets got over the negative surprise from the inflation data. This was reflected in particular in bonds and US technology stocks, where stocks such as Nvidia rose again by 2.5 percent. This shows that any weakness in the AI industry is used to make new purchases. Globally, bonds almost made up for the losses after the US inflation.
(Photo: Zacharie Scheurer/dpa-tmn)
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