market report
Status: 07/07/2022 4:05 p.m
Optimism is spreading on the German stock market. There is tailwind from a positive start to trading on Wall Street, where concerns about the economy have eased somewhat.
In the afternoon, the DAX is very close to its daily high of 12,860 points, 2.1 percent above the previous day’s level. The leading German index had already increased by 1.6 percent to 12,595 points yesterday.
Among other things, hope for a growth spurt in the important trading partner China brings support. According to a report by the Bloomberg news agency, the Chinese government wants to allow local authorities to issue additional bonds with a volume of 220 billion dollars to finance infrastructure projects.
Suddenly higher interest rates are positive
In addition, the recovery has recently been supported above all by hopes of a more moderate turnaround in interest rates in the USA. The minutes of the Fed meeting published yesterday evening show that the central bankers are planning further major interest rate hikes in view of the high inflation. An increase of 0.50 or 0.75 percentage points was announced for the end of July.
“It sounds somewhat paradoxical that the US Federal Reserve would provide some relief on the stock market with further interest rate hikes. However, investors interpret the determination of the Fed, which emerges from the meeting minutes on this point, as a sign of confidence in the robustness of the economy.” , explained capital markets strategist Jürgen Molnar of RoboMarkets. This means that the recession risks that have dominated recently have not received any new nourishment.
problems persist
Nonetheless, the outlook remains clouded, according to Helaba’s experts: Uncertainty about the economic prospects remains high, and in addition to the high inflation rates, the interest rate outlook and the ongoing delivery problems and shortages of materials and personnel are also having a negative impact. “In addition, there is a threat of a gas crisis in Central Europe.”
Ufuk Boydak and Christoph Bruns from the investment company LOYS view the situation somewhat more optimistically: “The prospects for the stock markets are by no means as negative as the macroeconomic situation seems to suggest. It must also be borne in mind that most stocks are now twenty percent cheaper than at the beginning of the year.”
Euro recovered slightly
The euro recovered somewhat today from its significant losses of the past few days. The common currency is oscillating around the $1.02 mark, costing a little more than the previous evening.
In the middle of the week, at $1.0162, the euro had fallen below the $1.02 mark for the first time in almost 20 years. An important reason for the fundamental weakness of the common currency is the ECB’s hesitant fight against high inflation.
British pound recovered slightly
Investors also looked to London, where Prime Minister Boris Johnson announced his resignation after a series of scandals. “The immovable object is finally giving way to the compelling force of ministerial resignations,” said Neil Wilson, chief analyst at online brokerage Markets.com. The pound sterling appreciated, but the increase was comparatively small at 0.3 percent to $1.1967.
Oil prices go up a bit
Oil prices have recovered somewhat from their recent slump today. Crude oil prices came under pressure for the second day in a row yesterday. Fears of a significant downturn in the global economy, which would also weigh on global demand for oil, petrol and diesel, were the main reason for the significant price reductions.
Europe’s natural gas prices continue to rise
Natural gas in Europe is becoming more expensive today. At the Dutch gas trading point TTF, one megawatt hour costs around 180 euros for the next six months. That’s a good ten euros more than yesterday and about twice as much as a month ago.
Vonovia wants to use less gas
Germany’s largest housing group Vonovia wants to save gas and is reducing the heating output in many of its apartments at night. “In order to save as much gas as possible in our stocks, we will successively introduce a night-time lowering of the heating temperature for the gas central heating systems in our stocks,” said a Vonovia spokesman. Vonovia reduces the heating output between 11 p.m. and 6 a.m. to 17 degrees Celsius. During the day and in the evening hours, the tenants could continue to heat as usual.
Auto stocks in high demand
The automotive sector is leading the upward trend in the DAX. Five titles from the industry occupy the first six places. The price gains are probably due not least to the previous high losses.
While the DAX fell by around 23 percent from the record high at the beginning of the year, the European automotive sector collapsed by 34 percent. Rising interest rates, which make purchase financing more expensive, strong inflation and a lack of components such as semiconductors had hit the industry hard. Apparently, investors now think the current prices are low enough to get back on board.
Volkswagen builds battery factory
With the laying of the foundation stone for its first battery factory in Salzgitter, Volkswagen is driving the transition to electric cars. “In the future we will take all relevant fields into our own hands and thus secure a strategic competitive advantage in the race for the pinnacle of e-mobility,” said VW Technology boss Thomas Schmall on Thursday in the presence of Federal Chancellor Olaf Scholz and Lower Saxony’s Prime Minister Stephan Weil .
Logistics entrepreneur Kühne largest Lufthansa shareholder
The logistics entrepreneur and billionaire Klaus-Michael Kühne is now after a stake increase largest shareholder of Lufthansa. His company Kühne Aviation (KA) now holds 15.01 percent of the airline. Kühne has thus replaced the Economic Stabilization Fund (WSF) of the Federal Republic of Germany as the largest shareholder.
The federal government holds 14.1 percent of the MDAX group. However, after the company has repaid the direct government aid that became necessary during the Corona crisis, the WSF will have to sell its shares again by October 2023.
Amazon Germany boss: shopping behavior has hardly changed
According to the head of Amazon Germany, Rocco Bräuniger, the increased cost of living has so far only had a minor impact on shopping behavior. That has hardly changed so far, said Bräuniger of the “Wirtschaftswoche”. “Instead of branded items, one or the other is now increasingly turning to inexpensive alternatives.” However, premium brands are still very popular. So far, business has been going well. “Overall, we are not registering any slump in orders,” said Bräuniger.
Big profit at Samsung
South Korean tech giant Samsung Electronics posted its highest profit in four years in the second quarter, thanks to strong demand for memory chips. From April to June, the operating result climbed by eleven percent to 14 trillion won (10.57 billion euros), said the world’s largest memory chip provider. Above all, chips for data centers were still in demand. Analysts also attribute the plus to the strong dollar.
About You remains on course for growth
The online retailer About You continued to grow in the first quarter of the year despite the difficult market environment caused by inflation and the war in Ukraine. However, the pace slowed compared to the previous quarter. Revenue rose by 19.4 percent year-on-year to a good 504 million euros. Adjusted earnings before interest, taxes, depreciation and amortization (adjusted Ebitda) amounted to minus EUR 28.8 million after minus EUR 12.3 million in the previous year.
General Motors suffers sales slump in China
The largest US carmaker General Motors (GM) had to cope with a severe sales dampener in China in the second quarter in view of the new Covid lockdowns. In the three months ended June, GM sold just 484,200 vehicles in its key international market. in the
GameStop stock split
Video games retailer GameStop plans to make its shares easier for small investors to trade by carrying out a 1:4 stock split. A stock split allows companies to increase the number of shares they hold. GameStop plans to pay out the additional shares in the form of a stock dividend. Investors receive additional share certificates instead of cash.