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Bull and Bear: Are investors being lured into the market too early by the recent jump in the price of the Dax?
Photo: Frank Rumpenhorst/ picture alliance/ dpa
After a two-day recovery rally, the German leading index Dax will initially come back a little on Wednesday.
The broker IG appraised the leading German index around half a percent lower to 12,614 points around an hour before the start of Xetra.
In the previous week, the Dax had fallen to 11,862 points, its lowest level since November 2020.
From this level it has recently recovered by almost 7 percent, but is now losing momentum in the area of the chart-technically important 21-day line.
The MDax and the EuroStoxx 50 had also made strong gains since the beginning of October.
The most important US indices Dow Jones, Nasdaq and S&P 500 each ended trading at daily highs.
After the European close, they didn't saddle up much recovery gains the night before.
Comeback to the stock markets or just another bull trap?
Given the recent weak US economic data, investors' appetite for risk is fueled by hopes that the US Federal Reserve will adopt a less restrictive monetary policy.
Many investors are hoping that the Fed will only raise interest rates hesitantly so as not to plunge the US economy into recession.
However, Fed Chairman Powell had so far shown his determination to fight double-digit inflation in the US with interest rate hikes.
The focus is now on the US job market report on Friday.
If the US jobs market turns out to be more robust than expected, this could indicate that the Fed still has room for sharp rate hikes.
Positive economic data would thus rekindle fears of further major interest rate hikes.
Stockbrokers are now discussing whether the strong price gains since Monday were an overdue recovery after the sell-off of the past few weeks or just another bull trap.
A bull trap is a short-term unsustainable recovery during a downtrend.
This lures investors who are speculating on further price gains (bulls) into the stock market.
But if the long-term trend is even lower, these investors will buy too early and incur losses as a result.
Wall Street is currently setting the pace of recovery.
The US indices had also started the new trading month strongly the day before and also increased significantly on Tuesday.
In the US as well as in Europe, a so-called "short squeeze" provided additional impetus: Numerous speculative investors and hedge funds, who have bet on further falling prices, have been faced with increasing losses since Monday, as the stock markets are rising again.
Many therefore liquidate their short position in order to either take profits that have already been made or not to lose even more money in the event of a loss.
Dow Jones climbs over 30,000 points again
The US stock markets continued their strong October start on Tuesday.
The hope that the urgency of more aggressive interest rate hikes by the US Federal Reserve is lessening is seen as the driver behind the strong start to the month after the extremely weak September.
Current US economic data had little impact on prices.
As expected, US industrial orders stagnated in August.
The
Dow Jones Industrial
surpassed the much-noticed 30,000 point mark in early trading for the first time since September 22nd.
Most recently, the leading US index was 2.27 percent higher at 30,161 points, expanding its winning streak to around 5 percent since Monday.
The market-wide
S&P 500
rose 2.55 percent to 3772 points on Tuesday.
The technology index
Nasdaq 100
gained 2.69 percent to 11,532 points.
"Optimism seems to be back in the market in October," commented Pierre Veyret of broker Activtrades.
However, the question remains whether this is a bear market rally or even a temporary reversal.
US airlines and Amazon asked
Airline stocks were among the biggest daily gainers.
American Airlines was up 8.1 percent, Delta Air Lines was up 8.3 percent, Jetblue Airways was up 7.8 percent and United Airlines was up 6.9 percent.
A particularly clear Nasdaq winner was Amazon, up 4.7 percent.
Analyst Brent Thill from Jefferies Research emphasized in a study that investors would get the traditional online trading business for free at the current price level.
The group's market valuation is currently lower than the value of the other divisions, according to Thill.
Asia's stock markets are picking up again
Markets in Asia breathed a sigh of relief on Wednesday on hopes of less aggressive interest rate hikes worldwide.
Australia's central bank started things off by surprising Tuesday with an unexpectedly small rate hike.
The Reserve Bank of Australia (RBA) raised interest rates by just a quarter of a percentage point on Tuesday.
Economists polled by Reuters had expected a larger rate hike of another half a point.
In addition, the recent slowdown in the economy is fueling speculation that the US Federal Reserve is slowing its rate hikes.
The number of job vacancies in the United States fell in August at the highest rate in almost two and a half years.
"Markets have regained more of the ground lost during the difficult weeks on Wall Street in the hope that the Federal Reserve will moderate its aggressive approach to its rate-hike plans," wrote an analyst at wealth manager Ord Minnett in a customer message.
The Nikkei index, which comprises 225 stocks, was 0.4 percent higher at 27,086 points.
The broader Topix index rose 0.3 percent to 1,912 points.
Stock exchanges in China are closed for a public holiday.
In Asian foreign exchange trading, the dollar was little changed at 144.12 yen and slipped 0.1 percent to 7.1135 yuan.
It was 0.1 percent higher against the Swiss currency at CHF 0.9801.
At the same time, the euro fell 0.2 percent to $0.9967 and fell 0.1 percent to CHF 0.9770.
Sterling lost 0.4 percent to $1.1432.
Bitcoin back above $20,000
The digital currency Bitcoin was last listed on the Bitstamp trading platform at 20,068 US dollars, staying above the psychologically important round mark for the second day in a row.
In November last year, the crypto currency reached a record high of 69,000 US dollars.
Oil prices
ease slightly
Oil prices have eased somewhat after the significant price gains on the previous day.
On Wednesday, a barrel (159 liters) of the North Sea Brent cost 91.72 US dollars.
That was 8 cents less than on Tuesday.
The price of a barrel of West Texas Intermediate (WTI) oil fell 19 cents to $86.33.
Most recently, reports of an imminent production cut by the Opec+ oil network supported oil prices.
This puts the focus on Wednesday's meeting of this oil cartel to set strategy for November.
In the room is a throttling of production to stabilize the recently fallen oil prices.
They have fallen by up to 30 percent since June on concerns of a global recession.
According to analysts, a clear market signal can therefore be expected.
However, a reduction would in fact be much smaller than the decision would suggest.
Because a number of oil-producing countries such as Angola, Nigeria and Russia are already producing significantly less than their previous agreements would allow, said Commerzbank expert Carsten Fritsch.
"In this respect, the actual reduction will be less than it says on paper."
With news agencies