When all the reviews of a positive trading week had already been written, the news came shortly before last weekend that no more gas would flow through Nord Stream 1 for the time being. Both the DAX after-hours and Wall Street slumped, having previously taken a positive view of the labor market data.
As expected, the price of European natural gas jumped on Monday, dragging the stock market down. But investors quickly pushed aside the question of how Germany's economy and households will get through the winter without Russian gas, and the DAX back towards 13,000 points.
Even the European Central Bank's historic decision to raise the key interest rate by 75 basis points ended up moving the stock market less than expected. The DAX swung down and up following the decision but went out of trading almost unchanged.
US Fed Chairman Jerome Powell also reaffirmed the consistent course of interest rate hikes. But here, too, Wall Street remained on course, all negative news seems to be priced in, and an oversold market is trying to turn the corner.
While one part of the investors are avoiding the stock market for the time being with the prospect of further rising interest rates, the other part sees the consistent and concerted fight of the central banks against inflation as a good signal for the future and is grabbing stocks regardless of all the risks.
Inflation Data And Bank Of England Meeting
How successful this battle against inflation has been so far for the central banks should become more apparent in the coming week. On Tuesday, consumer prices will be reported from the USA. There has been some recent easing after inflation came back a little in July at 8.5 percent.
Anything that confirms the downward trend is likely to receive positively from the stock markets. On Wednesday, the leading indicator for inflation will be producer prices. Monetary policy will be interesting on Thursday when the Bank of England meets for its next meeting.
With an inflation rate of a good ten percent, a further increase in the key interest rate by 0.5 percent to 2.25 percent should be almost decided. However, BoE representatives have recently dampened interest rate fantasies in the United Kingdom with a view to the negative effects of quantitative tightening.
On the corporate side, Lufthansa may have set the course for a positive future last week. Major shareholder Kühne let it be known that he continues to have an undiminished interest in the airline and wants to expand his current 15 percent stake.
At the same time, the pilots' union and the company reached a deal at the last minute, averting the previously announced two-day strike. And in the talks between the head of Lufthansa and its largest shareholder, this outcome may well have given a positive outlook for the future, despite the discussions about personnel and higher costs.
On the other hand, Uniper is deeper in the crisis than previously assumed. The federal government has already decided to take a stake in Uniper, as it once did in Lufthansa and Commerzbank. But until that happens, the company is under so much pressure that it needs new money.
Four billion to help with the seven billion euros in additional expenditure for replacing Russian gas, which the boss says will be reached this month. The example of Uniper shows how expensive the energy crisis will be for millions of households and how much financial support will be needed to save entire industries from collapse.
The stock market will also fluctuate in the coming week between long-term optimism and the short-term negative factors of the energy crisis and recession. From a technical point of view, however, the now almost comfortable jump of the DAX above 13,000 points offers the potential for further gains, despite the seasonally weakest stock market months of September and October.
DAX - Current Supports And Resistances:
- Supports: 12,900/12,850 + 12,700/12,650 + 12,400/12,350
- Resistances: 13,150/13,200 + 13,350/13,400 + 13,550/13,600