Magic courses in midsummer

Witches’ Sabbath or not: The strong upward trend in profits among companies on the Nasdaq is intact and is also driving the Dax to new records.

Solstice celebration in Stonehenge, UK

NNot only are the nights hot, the nights are also long. The sun has reached its highest level, the plants have reached the highest growth rate and the Dax has set new records on the stock exchange. St. John’s wort didn’t even grow against price movements, and that’s a good thing.

After all, the 100 largest German stocks from the FAZ index are characterized by the fact that, unlike real estate, for example, there is a very liquid market for them: At the end of the day, as many stocks always find a buyer as a seller. Why someone bought or sold can usually only be guessed at.

On the third Friday in June around the solstice, there are also magical moments, as it were, when futures contracts and options expire and market participants involved in them want to steer the underlying share prices in a direction that is favorable to them in the short term. Since the price movements are then even more obscure than usual, stock exchange traders have christened Fridays like this “Witches’ Sabbath”.

Let us turn to the facts: On Friday afternoon, the Dax fell significantly by 1.5 percent, but for the first time the index of the thirty largest German stock corporations reached almost 15,800 points this week, which is a whopping 27 percent more than before a year.

There are also weekly losers, such as Deutsche Bank. Its share price bucked briefly once when the US Federal Reserve announced that it could raise interest rates faster than expected in the fight against inflation. That would be good for banks. But the weekly trend for Deutsche Bank is clearly pointing downwards, while its share is still in the upper Dax third with a price increase of 35 percent for the year.


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To the detailed view

Is this the right time to start taking profits on the stock market, when the nights are getting longer again, China is throttling credit and the interest rate reversal is taking shape in America? The weak end of the week speaks for it.

But the upswing on the German stock exchange is still being supported by the American technology exchange Nasdaq, where prices are 46 percent higher than a year ago and annual corporate profits are likely to increase by almost the same amount.

While the chip manufacturer Infineon has been the second-best DAX value after Daimler with a 70 percent price gain for a year, other German technology stocks such as Morphosys and Teamviewer are showing high losses. The Tec-Dax is not even 10 percent higher than a year ago. Even after the solstice, one or the other high in midsummer could follow.