The DAX opened Thursday morning at a loss. By 9:30 a.m. the index had been calculated at about 23,535 points, which is 0.4 % below the previous day’s close. Zalando, Rheinmetall and Hannover Rück were the strongest performers, while BMW, Bayer and Continental lagged at the bottom of the ranking.
Oil prices continued to climb sharply. At around 9:00 a.m. German time, one barrel of Brent crude was trading at $95.68, up 4.0 % from the previous close.
Thomas Altmann of QC Partners warned that investors are increasingly focused on the Strait of Hormuz. “The longer the Strait of Hormuz remains impassable, the greater the economic impact and the more the world gets drawn into the conflict” he said. The rise in oil prices signals that most market participants do not believe that releasing parts of the Strategic Petroleum Reserve will be enough to sustainably curb price gains.
Altmann also noted that a sustained rise in oil prices could push inflation higher, adding extra strain to the economy. “The markets currently price in at least one rate hike by the ECB, with a 60 % probability of a second move. Higher rates would then be the second factor slowing economic growth” he said.
An analyst observing German investor sentiment looked at company revenues. “Yesterday, the DAX’s earnings reached a new annual low, almost half of the typical average” they said. The greatest worry for investors appears to be making wrong investment decisions at this time of uncertainty.
