A surprisingly strong US labor market report had little impact on the German stock market on Friday. The Dax, which had already been trending weaker in early trading, fell to its daily low immediately after the data, but recovered relatively quickly and somewhat limited its losses in late trading. Ultimately, the leading index lost 0.51 percent to 18,557.27 points, recording a weekly gain of around 0.3 percent. The MDax with the medium-sized stocks closed 0.62 percent lower on Friday at 26,861.07 points.
The US economy created significantly more jobs than expected in May. In addition, wage growth accelerated significantly. However, the unemployment rate also rose unexpectedly by 0.1 percentage points to 4.0 percent.
According to Thomas Altmann, analyst at QC Partners, the labor market report sends mixed signals: “This combination of a predominantly robust labor market and simultaneously high wage growth could keep the Fed from cutting interest rates for even longer.” If this trend continues, investors could well have to wait until December for a first US interest rate hike, instead of the previously expected cut in September, added the market expert.
The European Central Bank (ECB) had already cut interest rates the day before for the first time since 2019, thereby meeting market expectations. “The potential for surprise was low, so it is not surprising that investors merely shrugged off the – albeit historic – step of cutting interest rates before the Federal Reserve,” commented Jürgen Molnar from broker RoboMarkets. There were no concrete statements on the future path of interest rates.
The most important European stock exchanges also closed the week down. The Eurozone’s leading index, the EuroStoxx 50, fell by 0.35 percent to 5051.31 points. The CAC 40 in Paris and the FTSE 100 in London each lost around 0.5 percent. In the USA, the Dow Jones Industrial was around 0.2 percent higher at the close of European trading.
After real estate values had already come under pressure following the ECB’s interest rate decision, the downward trend continued. Morgan Stanley analyst Bart Gysens sees little chance of further price increases following the interest rate cut. He downgraded Vonovia to “underweight” and withdrew his buy recommendation for LEG. Vonovia lost 7.2 percent at the end of the DAX, LEG slipped 5.0 percent in the MDax. As a result, Aroundtown and TAG also clearly fell there.
In contrast, Infineon shares benefited from a positive analyst comment and rose by 3.7 percent at the top of the DAX. The French investment bank Exane BNP Paribas increased its price target for the semiconductor company to 53 euros and sees more than 40 percent price potential.
At Airbus, concerns about the delivery target increased, and shares fell by 2.2 percent. The world’s largest aircraft manufacturer delivered only 53 passenger jets to its customers in May. After five months, the DAX-listed company has not even reached a third of its annual target of around 800 aircraft.
On the foreign exchange market, the euro fell significantly after the US job data and was last quoted at 1.0804 US dollars. The European Central Bank (ECB) had set the reference rate at 1.0898 dollars in the afternoon.
On the bond market, the yield on outstanding bonds rose from 2.59 percent the day before to 2.64 percent. The Rex bond index fell by 0.29 percent to 123.83 points. The Bund future recently fell by 0.10 percent to 130.53 points.
Source: Stern
