market report
Status: 11.05.2022 4:18 p.m
The much-awaited inflation data in the United States does not give a real all-clear. However, the stock markets are banking on the fact that inflation has peaked.
High inflation in the US eased off in April, but only slightly. Consumer prices rose by 8.3 percent year-on-year, the US Department of Labor announced in the early afternoon. In March, the rate was still a record 0.5 percent. Inflation was still higher than analysts had expected. The average expectation was 8.1 percent. After all, it is the first drop in the rate since August 2021.
The financial markets reacted frantically to the eagerly awaited data, after all the US central bank’s interest rate path is largely determined by inflation. Initially, the pre-market US prices and the DAX came under a lot of pressure, but the leading German index is currently climbing significantly again.
Apparently, some investors are counting on the fact that the rapid devaluation of money has peaked and that there will be a certain relaxation in the coming months. “The high point of inflation seems to have been passed,” said economist Ulrich Wortberg from Helaba. However, hopes for a rapid decline are not appropriate “in view of the ongoing Ukraine war and the disrupted production activity in China and the supply chain problems.” In this respect, the US Federal Reserve remains under pressure to turn back the degree of monetary expansion.
On Wall Street, too, prices have recovered significantly half an hour after the start of trading. The Dow Jones gains around 0.8 percent, the technology stocks on the Nasdaq even a little more.
ECB prepares rate hike
The European Central Bank (ECB) is also concerned with the topic of price increases. ECB President Christine Lagarde is preparing the financial markets for this Rate turnaround scenario in July in front. Bond purchases are likely to be phased out early in the third quarter, followed by a rate hike that could come “a few weeks later,” Lagarde said at a conference in Slovenia today. Recently, the voices from the management level of the European Central Bank have increased, urging an early end to the ultra-loose monetary policy.
Euro with a small trend reversal
Against this background, the euro is now robust after a brief slump. The European single currency seems to be slowly leaving the downward trend of the past few days behind.
Oil prices are picking up again
Oil prices continue to recover from their recent setback. On the market, the price premiums were explained by the more favorable corona situation in China. The metropolises of Beijing and Shanghai have recently reported fewer infections. This makes it more likely that the strict corona requirements will be relaxed.
Heavy setback for Bayer
The biggest DAX loser is the Bayer share. The pharmaceutical and chemical company has suffered a setback in the US legal dispute over alleged cancer risks from the weed killer glyphosate. The US government advised the Supreme Court – the highest court in the country – yesterday from accepting a landmark case. The procedure could have a signal effect for many other US lawsuits. For Bayer, this involves legal risks worth billions.
E.ON earns significantly less
As expected, E.ON started the new year with a drop in earnings. Although the German network business grew, this was offset by negative effects in other countries. Among other things, the first three months were burdened by higher procurement costs. Adjusted earnings before interest, taxes, depreciation and amortization (Ebitda) fell by a good 14 percent to 2.1 billion euros in the first quarter. The bottom line was an adjusted group profit of 679 million euros, 16 percent less than a year earlier.
Continental suffers from Ukraine war
The automotive supplier and tire manufacturer Continental posted a slump in profits in the first quarter. The bottom line is that the net result fell by 45 percent to 245.4 million euros. “The past quarter was overshadowed by the war against Ukraine and the associated massive impact on already high energy prices and tense logistics chains and raw material markets,” says CEO Nikolai Setzer. Conti had already cut its earnings outlook in April.
TUI is happy about wanderlust
Travel provider TUI expects to return to profitability in the current financial year. The pandemic had caused the travel company to lose billions, but now things are “making significant progress”. The group will become profitable again. Package tours and cruises, part of the core business, had largely ground to a halt during the pandemic. In the 2020/21 financial year, TUI therefore posted a loss of 2.48 billion euros. People’s desire to travel is now increasing significantly again, explained TUI boss Fritz Joussen. For the summer of 2022, 85 percent of the pre-crisis booking figures have already been reached.
Thyssenkrupp raises the bar
The Thyssenkrupp share gains double digits in the MDAX. The steel and industrial group performed better than expected in the past quarter and increased its forecasts. The company benefits from higher prices in materials trading and in the steel business, as Thyssenkrupp announced. The adjusted operating result (EBIT) is expected to rise from 796 million euros to at least two billion euros. The management around CEO Martina Merz had previously promised up to 1.8 billion euros. The outlook is subject to the condition that fossil fuels, especially natural gas and raw materials, continue to be available without restrictions and raw material and energy costs remain at the level of the second quarter.
Full order books, but little material at SMA Solar
The solar technology manufacturer SMA is suffering from the global shortage of chips and was therefore not able to implement as much as it would have been possible in the first quarter. Sales fell from 240 to 221 million euros. The operating result (Ebitda) fell from 20 to 15 million euros. However, the order books are full: “In the first quarter of 2022, we recorded the highest order intake in the past ten years,” says CEO Jürgen Reinert.