Financial Markets: A Rollercoaster Week Ends with Recovery, But Uncertainties Remain
Tossing the Stock Market on its Axis - Bitcoin Embraces Stagnation
tom Frankfurt with a dash of spice and sarcasm
Weekend profits scored by Dax.
The与 stocks took a breather following a turbulent week, eventually ending the ride on Friday with an uptick. By the twilight, the stock market barometer climbed 0.7% to 19,984 points, nipping at the heels of the 20,000 point threshold once again. Although the all-time high of mid-December remains elusive, it's a tantalizing prospect.
"The stock markets have shrugged off the recent setbacks they received from the US Federal Reserve just before Christmas," commented Ulrich Kater, the chief economist of Deka Bank, spitting out his remarks with a hint of sarcasm. Although the Fed had lowered interest rates again on December 19, Fed Chairman Jerome Powell also suggested that they were nearing the point where they could slow down rate cuts. This didn't sit well with the stock markets, leading to a significant shakeup. Uncertainty was also brewing due to the incoming US President Donald Trump's economic policies and China's wobbly economic recovery. Consequently, investors have been offloading their shares quite enthusiastically. Despite these recent losses, the German benchmark index still boasts a yearly rise of over 19%.
Looking Ahead to January 20
As the calendar flips to January, investors will initially be focusing on two dates: On January 20, Donald Trump will be sworn in as the new US President. If the Republican implements the announced tax cuts, deregulation, and especially tariffs, it could derail the recent two-year Dax rally. November 3 can't come soon enough, as far as global markets are concerned. Furthermore, the German federal election, scheduled for February 23, could provide a fresh spark for the markets.
Among individual stocks, Delivery Hero shares took a tumble on Friday. The company won't be able to sell its Taiwan subsidiary Foodpanda's business to Uber, following a decision by the local competition authority TFTC. The stock plummeted to its lowest level since late August in early trading, shedding over 5% of its value. Uber had aimed to acquire the division for around $1 billion. Delivery Hero had hoped to use the net proceeds from the transaction to redeem convertible bonds and improve its financial structure, but those dreams have evaporated.
Fresh Wind for HelloFresh Shareholders
Shareholders of HelloFresh fared better. The meal kit provider has announced plans to buy back another €75 million worth of its own shares. Investors responded with a price surge of over 2%. The buyback aims to counteract the dilution that will result from the regular allocations under the company’s employee participation programs in 2025.
Spotlight on Hornbach Holding
Hornbach Holding shares took center stage in the SDax. The company is on the lookout for a new CFO. Karin Dohm has resigned, leaving the company by no later than March 31. CEO Albrecht Hornbach has kindly offered to shoulder the role of CFO on a temporary basis until a smooth transition can be arranged. The Hornbach shares briefly rose by over 3%, no doubt on the sudden influx of additional work responsibilities.
Bitcoin Holds Steady
BITCOIN (BTC) maintained its steadfast position on Friday. The oldest and most well-known cryptocurrency traded at $96,730 on the Bitstamp exchange late in the morning, fetching a minute premium over the previous evening. On Thursday, Bitcoin had failed to break the $100,000 mark and retreated. The cryptocurrency currently lacks clear catalysts. Last week, Bitcoin plunged for the first time since Donald Trump waltzed onto the political stage, after reaching a record high of $108,364 on December 17, following remarks by Fed Chair Powell that sent shivers down the spines of investors worldwide.
- Amidst the stock market's recovery, the barometer still hasn't managed to surpass the 20,000 point threshold, ending the week at 19,984 points.
- The upcoming deregulation and tariff policies proposed by the new US President could potentially halt the two-year rally of the German benchmark index.
- In a stark contrast, shareholders of HelloFresh rejoiced as the company announced a €75 million share buyback, causing the price to surge by over 2%.
- Bitcoin stabilized at $96,730 on the Bitstamp exchange, refraining from crossing the $100,000 mark in a week that saw it sink for the first time since Donald Trump's political debut.
- Hornbach Holding shares experienced a brief surge of over 3% following the resignation of Karin Dohm as CFO, with CEO Albrecht Hornbach stepping in to cover the role temporarily.
