Deutsche Boerse announced on Friday evening that the shares of the following ten companies will be newly included in the DAX as of September 20: Aircraft and defense group Airbus (now the fifth-largest DAX stock), online fashion retailer Zalando, flavors and fragrances maker Symrise, Porsche, sporting goods maker Puma, chemicals trader Brenntag, cooking box shipper HelloFresh and three companies from the healthcare sector; Siemens Healthineers, Sartorius and Qiagen. The adjustment is the largest to date in the 33-year history of the Frankfurt stock index. The expanded benchmark index is primarily intended to be more representative of the German economy but is also a result of the Wirecard scandal. In return, the MDax will be reduced from 60 to 50 stocks. On Friday, even before the announcement, the German stock leader closed -0.37% lower at 15'781.20 points in-line with the general trend, moving away from its record high reached in mid-August at 16'030 points.
On the New York Stock Exchange, the rather disappointing labor market data on Friday caused losses. The Dow Jones Industrial declined -0.21% to 35'369.09 points and thus recorded a moderate minus of -0.24% for the week. The S&P 500 closed on Friday virtually unchanged at 4'535.43 points (-0.03%), not far from the record high reached the previous day. The focus this week is the Fed's economic report (Beige Book) on Wednesday and the ECB's interest rate decision on Thursday.
Asia's stock markets were mostly up at the start of the week. After the weaker-than-expected US job market report, investors are betting on an even longer-lasting loose monetary policy. In Japan, the resignation of Prime Minister Yoshihide Suga attracted attention. After less than a year in office, Suga is drawing the consequences of ongoing criticism regarding crisis management in the corona pandemic.
The US economy created surprisingly fewer jobs than expected in August. At +235'000 new jobs, the analyst consensus of +733'000 nonfarm payrolls was missed by a wide margin and the weakest job growth since the beginning of the year was also recorded. On the other hand, the unemployment rate recorded in a separate survey fell to 5.2% in August from 5.4% a month earlier, reaching the lowest level since March 2020, virtually the beginning of the corona crisis. Overall, weaker job growth is more likely to reinforce the Fed's wait-and-see stance.
Sentiment among service companies in the US dampened in August from a high level. The purchasing managers' index of the ISM industry association fell from a record high of 64.1 points in July to 61.7. Overall, however, the sector has remained on a growth path for 15 months. Problems for service companies are increasingly caused by delivery problems and shortages of materials.
In the euro zone, activity in the industrial and service sectors cooled somewhat in August. This is indicated by the decline in IHS Markit's composite purchasing managers' index (PMI), which slipped from 60.2 points in July to 59.0. At well above 50 points, however, the PMI continues to signal quite solid growth.
|00:00||US||Labor Day Holiday - Markets closed|
|10:00||GE||Industry orders (July, m/m)||+4.1%|
|11:00||EZ||Sentix Economic Outlook (September)||+22.2|
|GE||Merck KGaA Capital Markets Day|
|USA||Moderna Research & Development Day|
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Source: LGT Bank (Switzerland) Ltd.
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