2023-09-29 17:43:29
Questions of taste in music and fashion, for example, are notoriously sensitive. So let’s try to stick to the stock market facts. September was also a bad month for stocks this year. The DAX lost more than 700 points over the course of the month, which corresponds to a loss of a good 4 percent. At its monthly low of 15,220 points, the Dax had given up all of its gains since March.
On the last two trading days, the Dax has now moved upwards again. It seems to be on command: After all, according to long-term statistics, the period from October to April is the good half-year for the stock market. Is the Dax now starting to at least have a year-end rally again?
The conditions are different than a year ago. With now a good 15,400 points, the DAX is a whopping 25 percent higher. The mood back then was bad. We discussed whether and how we as a country would get through the winter, the gas shortage – who remembers? Today Heino is trending. Hello?
The beer prices are of course far too high, but we don’t go here to get beer, we stay strictly sober: Inflation overall is decreasing. In October 2022, a price increase of a whopping 8.8 percent was measured in Germany. Now the inflation rate for August only shows a year-on-year increase in consumer prices of 4.5 percent. Last but not least, this good news helped the DAX achieve a small turnaround at the end of September. Finally, some investors are now hoping that interest rates will stop rising and may even fall again soon.
For our taste, however, these hopes are premature. Rather, it is important to note that the yield on ten-year US government bonds peaked at over 4.5 percent in September, which is the highest value in 16 years. One or two banks in Germany now pay a good 4 percent even for overnight money. In view of this long-missing interest rate alternative, companies have to make significantly more effort than a year ago to get investors excited about their shares. Commerzbank, for example, is making every effort.
The credit institution now wants to increase its return on equity from 4.9 percent to 11 percent in 2022, as Commerzbank announced on Thursday. When is the day of promise please? We read: In the year 2027. Will the current board still implement this? The investors who drove up Commerzbank’s share price on Friday apparently did not ask themselves this question. As if on command, they bought Commerzbank shares, so the board’s promise fell through, at least in the short term.
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Higher interest rates are changing the entire investment world. Anyone on the board who does not credibly promise their shareholders returns well above the risk-free interest rate of currently around 4 percent will feel that money is being diverted into interest investments. Some business models are now working worse, such as those of capital-intensive real estate companies. They also have a problem apart from the current precarious situation in China, where the real estate company Evergrande is faltering.
German real estate companies such as Vonovia, LEG and TAG have grown strongly during the low interest rate phase through acquisitions from competitors and the purchase of additional apartments. That made sense, because for property managers the costs decrease with each additional apartment because they have to keep a certain number of caretakers and craftsmen on staff anyway. But the acquisitions were often heavily financed by debt. If the loans gradually become due and then have to be renewed, the real estate companies’ costs will rise due to today’s higher interest rates. The higher interest rates also make business more difficult for corporate buyers like Daniel Křetínský, who is currently showing interest in Thyssenkrupp’s steel division.
So there is some evidence to suggest that the winners of the day before yesterday will not necessarily be the winners of tomorrow. Gerresheimer’s performance will be exciting next week. The medication packaging manufacturer’s shares lost more than 20 percent in September, but at around 100 euros the price is still twice as high as a year ago. Gerresheimer probably also suffered from the fact that competitor Schott Pharma managed the largest IPO this year and attracted investors. Some on the stock market are speculating that when the business results for the third quarter are presented next Thursday, the Gerresheimer board could raise its annual targets. Would that give the stock a boost again? And what does the IPO of tank gear manufacturer Renk, planned for October 5th, mean for the only major defense company on the German stock exchange to date, Rheinmetall AG?
Daniel Mohr Published/Updated: , Recommendations: 8 Hanno Mußler Published/Updated: , Recommendations: 24 Hanno Mußler Published/Updated: , Recommendations: 21
Finally, another song from Heino’s new album comes to mind: She only had shoes on. Who is probably the worst stock in the DAX this year? We report as if on command: Zalando with a price loss of 37 percent so far. The saying goes: “If she needs some rest, she orders shoes.” That was different in September – because of the good weather, it is feared. We also think: At least in Heino’s homeland, many people already have enough shoes on. But questions of taste are delicate. Heino makes the baller man tremble in his old age. That’s better than a major stock market earthquake, which luckily didn’t happen in September. Anyway.
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