Market report
Status: 11.08.2021 4:20 p.m.
US inflation will remain high, but at least it will not continue to rise. Investors are relieved to respond to this message. The DAX marks new record highs.
For a long time, the leading German index, the DAX, struggled to break its previous record high of 15,810 points, but in the afternoon the index finally made it in the wake of new US price data. At its peak, it rose to 15,887 points, an increase of around 0.7 percent. It is currently slightly below that with a premium of a good 0.4 percent. The afternoon, which is likely to be largely determined by the course of trading on Wall Street, will have to show where the new high will level off.
Otherwise, the German market is looking to the progress of the reporting season for the second quarter. In addition to DAX member Eon, a number of companies from the second row also opened their books today. Munich Re remains the front runner in the DAX, where the good figures from the previous day are still having an impact.
US consumer prices are stagnating at a high level
The inflation data had been anticipated with great excitement for days: in July consumer prices in the USA rose by 5.4 percent, while an average increase of 5.3 percent was expected. This means that prices will remain at a high level, but will not continue to rise for the time being. The core rate, i.e. the price development without the volatile energy and food prices, was exactly in line with expectations at plus 4.3 percent.
The big surprise with US inflation did not materialize, commented portfolio manager Thomas Altmann from asset manager QC Partners on the data.
“The inflation rate is still high. Nevertheless, it is gratifying that the recent rise in inflation has not accelerated any further. However, the US Federal Reserve cannot sit back and relax. The inflation hump remains for the time being, since above all pandemic-side inflation forces are almost unbroken. They will be but not set permanently, “commented Bastian Hepperle from Bankhaus Lampe.
Central bank not under pressure to act
Above all, the stock market is satisfied that inflation is not getting out of hand and that there is therefore no immediate reason for the US Federal Reserve (Fed) to suddenly step on the brakes. According to the Fed’s official interpretation, the higher inflation rates are a temporary phenomenon that will weaken over time. However, experts have recently increasingly doubted this.
“It remains questionable, however, whether the surge in inflation is only a temporary phenomenon, as the Fed assumes, or whether it could be a longer-term problem,” said NordLB analysts. “The question cannot yet be answered reliably and unequivocally.”
The main focus of the central bank is anyway on a recovery of the labor market after the crisis. This is progressing, but rather slowly. The focus is now on the upcoming top meeting of central bankers in Jackson Hole. Experts expect hints of how the central bank wants to gradually exit its bond purchase program of currently 120 billion dollars a month – a process known in technical jargon as tapering.
Wall Street opens higher
In New York, too, some investors would have felt a load off their hearts at first, because worse had been secretly believed to be possible. Investors had held back in advance, but had not dropped out either.
With today’s data behind them, they are accessing them again, even if they are still a little hesitant about the technology stocks that have been neglected recently. In any case, the leading index Dow Jones and the market-wide S&P mark further records in early business. The price development was the top topic of the past few days, the progress of the infrastructure plans in the US in the Senate, however, could not drive the market up any further yesterday.
Inflation in Germany at a 30-year high
German consumer prices climbed 3.8 percent in July compared to the same month last year. The reintroduction of the old VAT level, expensive energy and bottlenecks in a number of goods were responsible for this. The last time there was a higher rate of inflation was in December 1993, at 4.3 percent, as reported by the Federal Statistical Office. Nevertheless, economists assume that inflation will weaken again in the coming months.
Euro is recovering, Bitcoin continues to rise
According to the price data, the euro is gaining ground on the foreign exchange market and is currently trading just under 0.3 percent higher at $ 1.1742. Fears of US interest rates had recently put the common currency under pressure and dropped it to just under the $ 1.17 mark. There is also an upward trend in cryptocurrencies. Bitcoin remains at a high level with prices a little over $ 46,000. A unit of Ethereum costs around $ 3,200.
E.ON wants more profit
There is no significant movement in the share price of the energy company E.ON. After growing in the first half of the year, the company has raised its forecast. Adjusted for one-off effects, earnings before interest and taxes (EBIT) rose in the first six months of 2021 by 45 percent to 3.2 billion euros, thanks in part to higher gas sales. Adjusted EBIT in the range of 4.4 to 4.6 billion euros and adjusted net income of 2.2 to 2.4 billion euros for the full year 2021 are now expected.
Uniper is burdened by CO2 costs
The former E.ON subsidiary Uniper earned less in the first half of the year. The earnings before interest and taxes (EBIT) adjusted for one-off effects have shrunk to 580 million from 680 million euros, the Düsseldorf-based company announced today. Among other things, higher provisions for the acquisition of pollution rights would have had a negative impact. However, the group confirmed its outlook for adjusted EBIT for the 2021 financial year of 800 to 1.05 billion euros.
Thyssenkrupp shares keep falling
In the MDAX, the shares of the industrial and steel group Thyssenkrupp slipped by up to eight percent. The expectations of the industrial group were not high, but the reduction in the target for the free inflow of funds is putting a strain on the course, said a market participant. Thyssenkrupp continued its recovery in the third fiscal quarter. Earnings, sales and incoming orders improved noticeably compared to the previous year’s period, which was weak due to the pandemic. Between April and the end of June, incoming orders almost doubled to EUR 8.8 billion. Sales increased by 51 percent to 8.7 billion euros.
Lanxess sets high standards
In the second quarter just ended, the specialty chemicals group Lanxess increased its operating profit by just under a quarter to EUR 277 million compared to the previous year’s corona-affected period, with sales up by a good quarter to EUR 1.83 billion. Good business with the auto industry and with materials related to material protection, disinfectants and water treatment make the chemical company Lanxess more optimistic for 2021.
Talanx defies disasters
The insurance group is able to raise its profit target despite the expensive damage from the flood disaster in western Germany. The floods caused gross damage of 600 million euros, two thirds of which was attributable to the reinsurance subsidiary Hannover Re, explained Talanx in Hanover. Nevertheless, the insurer now expects a net profit of 900 to 950 million euros in 2021; previously, 900 million euros was the upper limit. Gross premiums are also likely to grow faster than expected.
Jenoptik hopes for the second half of the year
The technology group increased sales and profits in the second quarter. The company announced that sales increased by 29.6 percent to 213 million euros. The operating result (Ebitda) more than doubled to 53.7 million euros. “On the basis of the very good results and in anticipation of a strong second half of the year, we are well on the way to achieving the recently raised targets for 2021,” said Jenoptik boss Stefan Traeger.
Lenovo with a top margin
The high demand in the corona-related home office era has helped the world’s largest computer manufacturer to jump in profit. In the first fiscal quarter from April to June, profits more than doubled to $ 466 million. Sales rose 27 percent to $ 16.9 billion. This gave Lenovo a margin of 2.8 percent – according to its own information, one of the highest in years. After the quarterly figures were announced, the share rose by almost ten percent.
Coinbase creates almost 5000 percent profit increase
Coinbase, the largest US trading platform for cyber currencies such as Bitcoin, made splendid earnings in the second quarter despite the sudden end of the record hunt on the crypto market. In the three months to the end of June, profit shot up by around 4900 percent year-on-year to $ 1.6 billion. The proceeds grew by over 1000 percent to two billion dollars.