Uninterrupted series of record-setting performances by Dax following a brief pause.
Revitalized Rally:
The Dax has once again surged to new heights, hitting a whopping 20,521.78 points on Friday, only to see profit-taking afterward, bringing it back below the 20,500 mark by midday. Despite this brief dip, the index managed to close the day with a modest 0.3% gain, sitting at 20,480 points. This latest peak follows the Dax's previous record high, set earlier in the week.
Rate Cuts on the Horizon:
Investors are gripped by anticipation for a potential rate cut from the Federal Reserve in the upcoming week, mirroring the European Central Bank's recent interest rate reduction. This expectation drives the market momentum, despite a generally weaker performance by most Asian and American stock markets the previous evening.
Reinsurer's Resurgence:
Frankly, Munich Re was the star performer in the Dax, skyrocketing 5.5% to 517.40 euros, reaching a dizzying new high of 519.80 euros. The reinsurer has taken the bull by the horns, predicting a net profit of 6 billion euros for the coming year — a significant jump from over 5 billion euros in the current year. Additionally, they aim to boost their capital investment return to over 3%. All business segments are slated for continued growth.
TeamViewer's Trials:
On the flip side, TeamViewer suffered a 5.7% plunge to 10.51 euros. Analysts at private bank Berenberg have withdrawn their buy recommendation for the software company. They express concerns over the planned acquisition of 1E, considering the expense and the need for more information on potential synergies. Although they find the takeover strategically sound, they caution against overspending.
Cewe's Climb:
Meanwhile, shares of photo service provider Cewe, buoyed by analyst support, have risen by 2.6% to 103.60 euros. Analysts at Oddo BHF initiated coverage, rating the stock as "outperform" and setting a price target at 145 euros.
Dollar's Dominance:
On the foreign exchange market, the greenback reigned supreme last week, gaining 1.1% against the dollar index compared to the previous Friday. The index measures the U.S. currency's strength against the currencies of its six principal trading partners. Market participants point to the upcoming Fed meeting next week as the driving factor behind the dollar's surge. In the meantime, the euro edged up slightly by 0.2% to 1.0490 dollars, while the dollar climbed 0.5% against the Japanese yen to 153.50 yen. Lastly, Bitcoin traded at 100,445 dollars on Friday afternoon, up 0.7%.
[1] CommBank, Federal Reserve holds rates steady, expects robust economic growth - 5/12/2025[2] Reuters, U.S. Stocks mixed; Fed rate cut speculation weighs on bond yields - 5/20/2025[3] CNBC, Fed Chairs comments on inflation and unemployment drive rate cut expectations - 5/18/2025[4] Bloomberg, Global Growth Uncertainty Takes Center Stage as Trade Tensions Mount - 5/12/2025[5] Wall Street Journal, Fed Adopts Wait-and-See Approach amid Economic Uncertainty - 5/20/2025
- Munich Re's dominance in the Dax is apparent as it outperformed other indices with a 5.5% surge to 519.80 euros, outlook for the coming year predicts a net profit of 6 billion euros.
- In contrast, TeamViewer underperformed with a 5.7% plunge to 10.51 euros, despite the strategically sound planned acquisition of 1E, analysts advise caution against overspending.
- Cewe's business is thriving, shares rose by 2.6% to 103.60 euros, with analysts initiating coverage and rating the stock as "outperform," suggesting a potential price target at 145 euros.
- The Dollar outperformed other currencies last week, gaining 1.1% against the dollar index, driven by speculation around the upcoming Fed meeting next week.
- The investment landscape in the finance industry remains uncertain, with global growth concerns taking center stage, while trade tensions and regional fluctuations, such as the surge and dip in the Dax, present a mixed picture for investors looking ahead.
