The DAX index fell by 0.6% to 19,148 points, reversing gains from the previous Friday. Despite an initial rise to 19,286, the index struggled to maintain momentum ahead of the US presidential elections. Key resistance levels are at 19,250 and 19,330, while support is found at 19,048 and 19,000.
Investors are closely watching the upcoming US presidential election, with Kamala Harris slightly leading Donald Trump according to Predictlt. The Federal Reserve and Bank of England are set to announce interest rate decisions this Thursday, while key economic data and corporate earnings reports will also influence market movements. Increased volatility is expected as the election outcome may take time to finalize.
Commerzbank CEO Bettina Orlopp is strategizing to unlock capital for payouts or investments amid a potential takeover by UniCredit. She aims to keep the growth in risk-weighted assets several billion euros below the 2027 target by implementing significant risk transfers and possibly reducing exposure to low-yielding clients.
The DAX index rebounded at the start of November, closing at 19,255 points after a 0.9% gain, recovering from a weak October. The upward momentum could lead to a break above the October low of 19,330, while a drop below 19,250 may test lower support levels. The index, consisting of 30 major German companies, is a key performance indicator for the Frankfurt stock market.
The US labor market experienced a modest increase of only 12,000 jobs in September, impacted by hurricanes and strikes. Analysts suggest that even without these disruptions, the employment figures would likely remain lackluster. The true state of the labor market may become clearer with the upcoming reports for November and December, while the US Federal Reserve is expected to lower interest rates again soon.
Incompetence and scandals led to the downfall of Credit Suisse (CS), while UBS's focus on wealth management has made it more resilient. However, UBS is now deemed "too big to save," raising concerns about its liabilities and the effectiveness of cross-border bank mergers without clear resolution rules. Banking expert Martin Hellwig warns that higher capital requirements are essential for stability, yet the influence of banks has hindered significant reforms since the 2008 crisis.
The DAX index faced its third consecutive day of losses, dipping to a low of 19,005 before recovering slightly to close at 19,078 points. Despite a positive test of the 50-day moving average, the index fell 1.3% in October, with critical support levels at 19,000 and 18,912. For upward momentum, the DAX needs to surpass the 19,250 mark and the previous week's low of 19,330.
UniCredit SpA has received a credit rating upgrade from Fitch Ratings, moving from BBB to BBB+, which reflects its strong international presence and improved profitability. This upgrade comes as the bank considers a potential takeover of rival Commerzbank AG.
Economists express caution regarding the unexpected 0.2% growth of the German economy in Q3, labeling it an "upward outlier." Despite slight growth driven by government and consumer spending, indicators suggest a challenging winter ahead, with stagnation expected in Q4 and a projected GDP decline of 0.2% for the year.
UBS CEO Sergio Ermotti has expressed support for bank mergers in Europe, particularly hinting at a potential merger between Unicredit and Commerzbank. He emphasized the need for consolidation to strengthen banks and boost the European economy, arguing that national interests should not hinder this process.
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