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FRANKFURT (Dow Jones) — Europe’s stock markets are asserted on Thursday afternoon. The economic data of the day surprised on the positive side this time. The DAX is unchanged at 13,220 points, the Euro-Stoxx-50 is down 0.1 percent to 3,663 points. Better German GDP and the Ifo index have a slightly supportive effect: GDP for the second quarter was revised marginally upwards. Instead of the original stagnation, GDP growth is now modest at 0.1 percent. In the USA, too, GDP was revised upwards, at 0.6 percent lower than the previous quarter than initially reported.
The focus is now on the most important event, the central banker meeting in Jackson Hole: the speech by US Federal Reserve Chairman Jerome Powell on Friday is being eagerly awaited. However, an increase in the price data within the US GDP (deflator) to plus 8.9 percent has traders worried that Powell will definitely be making hawkish statements. Accordingly, the 10-year US yield jumped back up significantly to 3.12 percent.
In Europe, the price of gas has meanwhile jumped over the 300 euro mark and points to a cost shock for consumers in winter. In addition, state aid will hardly be possible: In Germany, the Federal Audit Office warns that the German state is losing its ability to act due to financial overload.
Don’t rejoice too soon because of the better Ifo index
Investors should therefore not be too happy about the Ifo business climate. At 88.5 points, it was significantly higher than feared in August, but “this does little to change the fact that the expectations component gives a devastating outlook for the coming autumn and winter months,” emphasizes LBBW economist Elmar Völker. The recent price hikes on gas and electricity market are not yet fully covered by the current survey.
And Commerzbank chief economist Jörg Krämer mainly suspects a relaxation in the material shortages as the reason for the better Ifo. It doesn’t change the fact that a recession is looming: “Driven by skyrocketing gas prices, inflation is likely to come close to the 10 percent mark in the fourth quarter.” Wages, on the other hand, will only grow by up to 3 percent. The resulting loss of purchasing power is massive. This explains the rather restrained reaction to the data, because the DAX has clearly come back from the daily highs.
Central Bankers Meeting in Jackson Hole begins
The international focus is on Jackson Hole: the annual central bankers’ symposium takes place there from Thursday to Saturday. Representatives of major central banks have been meeting there since 1982 at the invitation of the US Federal Reserve. ECB chief Christine Lagarde is not there.
The speech by Fed Chair Jerome Powell on Friday is awaited with particular excitement. Ulrich Stephan, investment strategist at Deutsche Bank, assumes, among other things, that Powell will explain how the inflation target of 2 percent is to be achieved again. If Powell does not give any indication that interest rate hikes will be lower in the future than in the two previous meetings, the euro is likely to come under further pressure.
Fertilizer is becoming even scarcer – pharmacies are collapsing
Salesforce’s lowered outlook weighs only slightly on SAP, with shares falling 0.9 percent. However, the rise in the dollar against the euro is having a supportive effect. The previous evening, the SAP competitor had lowered its forecasts for the current financial year.
Hellofresh is down another 2.6 percent. Remaining in the DAX index is in question at the next index revision.
Online pharmacies also continue to collapse. The Rose rose by 11 percent and Shop Apotheke by almost 5 percent. There are still concerns about the introduction of e-prescriptions in Germany.
However, the prospect of further increases in fertilizer prices is driving K+S by 7 percent and Yara by 3.3 percent. The Norwegians had announced that they would reduce production in Europe even further because of the high gas prices.
Aroundtown shares are down 1.4 percent. The real estate group increased profits in the first half of the year thanks to increased rental income. However, the MDAX-listed company only confirmed its forecast for the year as a whole.
Strong numbers from CRH – Novartis wants to spin off Sandoz
The Irish building materials group CRH delivered strong business figures. Shares are up 3.2 percent in London. Above all, the analysts at Davy praised the increase in margins as “outstanding” with a plus of 90 basis points. As a result, EBITDA increased by 23 percent more than the market had expected.
Novartis are giving up 1.4 percent, even though the pharmaceutical company wants to spin off its Sandoz generics and biosimilars division. Sandoz is to be listed on the stock exchange again as an independent company in Switzerland. However, this step is not unexpected.
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Stock index last +/-% absolute +/-% YTD
Euro-Stoxx-50 3.662,79 -0,1% -4,67 -14,8%
Stoxx 50 3,649.05 +0.1% 3.03 -4.4%
DAX 13.229,77 +0,1% 9,71 -16,7%
MDAX 26,029.60 -0.1% -27.91 -25.9%
TecDAX 3.043,36 +0,3% 8,21 -22,4%
SDAX 12,234.11 -0.3% -41.76 -25.5%
FTSE 7.477,92 +0,1% 6,41 +1,2%
CAC 6.366,62 -0,3% -20,14 -11,0%
Fixed income market last absolute +/- YTD
German ten-year return 1.34 -0.03 +1.52
US 10-year yield 3.11 +0.01 +1.60
FOREX last +/- % Thu 8:23 Wed 18:21 % YTD
EUR/USD 0,9965 -0,0% 1,0012 0,9961 -12,4%
EUR/JPY 136.42 -0.2% 136.91 136.46 +4.2%
EUR/CHF 0.9610 -0.3% 0.9648 1.0345 -7.4%
EUR/GBP 0,8443 -0,1% 0,8455 0,8446 +0,5%
USD/JPY 136,91 -0,2% 136,69 137,01 +18,9%
GBP/USD 1,1801 +0,1% 1,1842 1,1793 -12,8%
USD/CNH (Offshore) 6,8638 -0,2% 6,8546 6,8760 +8,0%
Bitcoin
BTC/USD 21.648,09 +0,3% 21.720,93 21.754,86 -53,2%
CRUDE OIL last VT settlem. +/- % +/- USD % YTD
WTI/Nymex 94,93 94,89 +0,0% +0,04 +33,8%
Brent/ICE 101,97 101,22 +0,7% +0,75 +36,9%
GAS VT-Settlem. +/- EUR
Dutch TTF 309,10 292,15 +5,8% +16,95 +380,2%
METALS last day before +/- % +/- USD % YTD
Gold (Spot) 1.755,05 1.751,39 +0,2% +3,66 -4,1%
Silver (Spot) 19.13 19.19 -0.3% -0.06 -17.9%
Platinum (Spot) 883.85 880.50 +0.4% +3.35 -8.9%
Kupfer-Future 3,70 3,64 +1,4% +0,05 -16,6%
YTD at the close of the day
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(END) Dow Jones Newswires
August 25, 2022 10:01 AM ET (14:01 GMT)
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