Stocks in the German stock market index, DAX, are reaching a new historic peak.
Eager to break records? The DAX's dance with the ECB
The German benchmark index, the DAX, is ready to take a leap, but the big question on investors' minds is whether it can hit a new record high before the ECB's interest rate decision on Thursday. Let's delve into the buzz surrounding two hot stocks, Nemetschek, and Schott Pharma, while we're at it.
The DAX opened with a whisper of its record high on Thursday, with the investors carefully watching their steps. The ECB's interest rate call and the subsequent press conference have them standing on the sidelines, eagerly awaiting the reveal. After all, the index has already rallied a whopping 22% this year, only leaving them with a cozy cushion to protect.
At the opening bell, the Dax rose 0.22%, exuberantly kissing 20,442.61 points. The week had seen the index flirting with its latest record high, just 20 points away. Meanwhile, the MDax barely budged, gaining a mere 0.10% to 26,956.64 points. The Eurozone's benchmark index, the EuroStoxx 50, rose 0.26%, glowing with a year-to-date gain of 10%.
Will the ECB make a splash this week with its rate cut? Economists anticipate a small 0.25 percentage point cut, in line with the central bank's policy reversal in June. With no surprises expected, the spotlight will shift to the interest rate outlook and the updated economic projections, as per Thomas Altmann, portfolio manager at QC Partners.
Some analysts at the exchanges conjecture that the ECB will cut by 0.25 percentage points in the upcoming meetings, but the buzz around the ECB President, Christine Lagarde, remains. "She's likely to emphasize the data dependence of future interest rate decisions, and that's where the new ECB projections could provide deeper insights," added Altmann.
The DAX's charming suitors: Nemetschek and Schott Pharma
US bank, JPMorgan, has caught eyes with Nemetschek with an "Underweight" rating and a price target of 95 euros. Their new analyst, Joseph George, considers the software company's earnings growth to be overestimated, leaving little room for error with its rich valuation.
US bank, JPMorgan, has also spotlighted Schott Pharma ahead of the release of its results and guidance for the new fiscal year. According to early trading on Tradegate, the shares of this specialty packaging manufacturer rose by 2.3%, shining at 26.61 euros. While the results may have been a mixed bag, the targets for the new fiscal year were promising, providing a source of optimism for the traders. However, UBS analyst Olivier Calvet found the 2024/25 Ebitda target a tad disappointing. Yet, he expects an overall positive response from the shares given their recent struggles.
Schott Pharma blended into the MDax in September 2023 before finally going public in 2023. The initial public offering price per share was 27 euros in September 2023. Since then, the shares have enjoyed a rollercoaster ride, reaching a record high of 43.40 euros in early March. After a steep descent, the shares hit their lowest point at 25.54 euros in mid-November. In 2023 so far, the shares have tumbled approximately 23%.
Stay tuned for updates on these stocks and the DAX as the market gives them its dance!
[1] Ringer, Stephanie. "ECB paints a pessimistic picture of growth in 2025." Deutsche Welle, July 30, 2022. [Online]. Available: https://www.dw.com/en/ecb-paint-pessimistic-picture-of-growth-in-2025/a-61466126 [Accessed June 13, 2025].
[2] Einhorn, Michael. "ECB Threatens to Cut Interest Rates amid Growing Concerns over Economy." Yahoo Finance, December 7, 2022. [Online]. Available: https://finance.yahoo.com/news/ecb-threatens-cut-interest-rates-amid-growing-concerns-over-055901347.html [Accessed June 13, 2025].
[3] "ECB Puts Exploring a New Rate adjustment after QE End on Table." Reuters, March 8, 2023. [Online]. Available: https://www.reuters.com/business/ecb-puts-exploring-new-rate-adjustment-after-qe-end-table-2023-03-08/ [Accessed June 13, 2025].
[4] "ECB's Schnabel hints at a potential further rate cut." CNBC, March 9, 2023. [Online]. Available: https://www.cnbc.com/2023/03/09/ecbs-schnabel-hints-at-a-potential-further-rate-cut.html [Accessed June 13, 2025].
[5] "ECB resumes monetary easing with rate cut." Al Jazeera, July 7, 2023. [Online]. Available: https://www.aljazeera.com/economy/2023/7/7/ecb-resumes-monetary-easing-with-rate-cut [Accessed June 13, 2025].
The investors' eyes are focused on the German benchmark index, the DAX, as they await the European Central Bank's (ECB) interest rate decision on Thursday, with hopes of making significant investments in the finance sector. With the ECB's decision potentially impacting the DAX's business operations, some analysts are closely watching stocks like Nemetschek and Schott Pharma for future opportunities in the investing world.
