market report
Status: 11/23/2022 12:29 p.m
The DAX made no progress at midday either, despite good indications from Wall Street. Important economic data and signals from the US Federal Reserve call for caution.
At 14,400 points, the German stock market index is also circling its previous day’s close at half-time. After the gains achieved in the past few weeks, the DAX is not swinging into correction mode; upwards, however, the air also seems to be getting thin at the moment.
DAX shows resilience
“The quiet consolidation at a high level further shows the resilience of the German stock index to bad news,” says Jochen Stanzl, analyst at online broker CMC Markets. Even if the fundamental framework conditions in Germany are anything but rosy, investors are counting on the central banks.
What does the Fed say?
Investors are eagerly awaiting the minutes of the US Federal Reserve’s most recent interest rate meeting, which will be published on the evening of German time. Fed Chair Jerome Powell has signaled that policymakers may be slowing down some of the pace of rate hikes in the near future.
Before tomorrow’s “Thanksgiving” stock market holiday in the USA, some economic data are also expected in the afternoon. The purchasing manager indices from the USA and the US consumer climate determined by the University of Michigan are on the agenda.
German economy stops downslide
Encouraging data came from the German economy in the morning. The purchasing managers’ index for the private sector – industry and services together – rose by 1.3 to 46.4 points. This was announced by the financial services provider S&P Global. Nevertheless, the barometer, which has received a great deal of attention on the financial markets, remained below the 50 mark for the fifth month in a row, from which point it signals growth.
Euro still in bullish mode
The prospect of a smaller interest rate differential between the dollar and the euro is helping the common currency to bring parity back a little with the dollar. At midday, the euro was trading at $1.0320.
Oil price stable
A barrel (159 liters) of North Sea Brent costs US$ 88.37 at noon, about the same as the day before. According to experts, China’s handling of the current corona wave is currently decisive for the price development on the oil market. After increasing numbers of infections and new deaths, the political leadership has tightened its already strict pace in some metropolises. The result is a constant strain on the economy and oil demand.
Siemens Energy in demand in the DAX
The energy subsidiary of the Siemens group, Siemens Energy, is at the top of the DAX with a plus of around three percent. On the other hand, investors avoid Siemens Healthineers after a downgrade. The shares of the medical technology group slipped to the bottom of the index with a price drop of 3.7 percent. Jefferies analysts put the stock on hold from a previous buy. In view of staff shortages and higher financing and construction costs, the experts at the investment bank were cautious about order growth next year.
Collective bargaining agreement at VW
With slight losses, the VW share ranks in the middle of the DAX. According to Volkswagen, after more than 16 hours of “intensive negotiations”, early Wednesday morning reached a collective bargaining agreement above the in-house tariff. The IG Metall trade union and the Wolfsburg car manufacturer have agreed on two-step increases in income of 8.5 percent and a net one-off payment of EUR 3,000 over a period of two years.
Valneva copes with vaccine flop
According to a media report, the Franco-Austrian biotech group Valneva expects manageable financial consequences despite the meager demand for its inactivated corona vaccine. The exact costs are still open, “but it’s probably less than 20 percent of all expenses that we have made around Covid,” CEO Thomas Lingelbach told the Austrian news agency APA. In addition, it is still unclear whether Valneva will ultimately exit the Covid vaccine development with red or black numbers. In any case, there would be no financial problems.
SFC asked for major order
After the largest fuel cell order in the company’s history, the shares of SFC Energy are increasing significantly. The strategic follow-up order from LiveView Technologies USA confirms the high demand for fuel cells and forms the basis for the future US presence, according to the company.
Manchester United share a pawn?
The share of the British football club increases by around eleven percent in London trading. The American owners of Manchester United are considering selling the English Premier League club. As the association announced, the Glazer family is considering external financing to promote growth. “As part of this process, the board will consider any strategic alternatives, including new investments in the club, a sale or any other transaction affecting the company.” The announcement came about four hours after the announcement that Manchester United and soccer superstar Cristiano Ronaldo were terminating the contract.
Credit Suisse shareholders approve capital increase
The shareholders of the crisis-ridden Swiss bank have approved a capital increase. At an extraordinary general meeting, more than 90 percent voted in favor of management’s plans, as Credit Suisse announced. Among other things, the Saudi National Bank from Saudi Arabia acquires a stake of around 9.9 percent. There is an offer of additional purchases for existing shareholders. Overall, the new shares are expected to bring four billion francs into the coffers. With this rescue plan, the bank wants to get out of the crisis after billions in losses.
HP is also planning mass layoffs
The US computer manufacturer HP wants to cut around 4,000 to 6,000 jobs worldwide by the end of the 2025 financial year. Costs and other expenses of around one billion dollars are likely to be incurred for the restructuring, the company said last night. For the fourth quarter, HP announced a decline in sales by eleven percent to $14.8 billion. Previously, other companies in the technology industry, such as Amazon and Meta, had announced plans to lay off employees due to a likely economic downturn.