market report
Status: 07/22/2022 07:51 a.m
After the ECB’s big rate hike, investors are beginning to realize what this move means for stock markets. The DAX is likely to go into the last trading day of the week with losses.
At the end of the week, the DAX should start XETRA trading at a discount. The broker IG estimates the 40 German standard values 0.6 percent lower at 13,172 points. The leading German index initially failed in its downward trend, which started at the high for the year and is currently around 13,250 points, and bounced back down again.
Negative signal for the DAX
DAX investors are still digesting the turnaround in interest rates that started yesterday. With its first interest rate hike in eleven years, the ECB took an unexpectedly strong step of 50 basis points against the escalating inflation.
Such a significant interest rate hike is a negative signal for the stock markets in two respects. First, it makes stocks less attractive compared to bonds. Secondly, it shows how serious the situation is when even the otherwise hesitant and hesitant ECB President Christine Lagarde suddenly sheds her shyness about bold action and dares to take a big interest rate hike.
Is the ECB too late?
Other central banks such as the US Federal Reserve (Fed) had already taken up the fight against inflation much earlier and with more commitment by raising interest rates sharply. From a global perspective, the ECB is a clear laggard with its interest rate turnaround, which has only just been initiated.
Quite a few experts therefore fear that the ECB will now be forced to raise interest rates more quickly and significantly at the coming meetings than would have been necessary if it had intervened earlier.
Gas flow through Nord Stream 1 remains constant
After all, when the Baltic Sea pipeline went into operation on Thursday, fears that Moscow could leave the tap permanently turned off were initially unfounded.
According to network data, gas has been flowing continuously through the Nord Stream 1 pipeline since the maintenance work was completed. The government, business and experts are nevertheless preparing for the gas crisis to continue or even worsen.
Late rally on Wall Street
Good guidelines for DAX trading come from Wall Street. There, the major US indices accelerated again late yesterday and closed at or near their daily highs.
The US leading index Dow Jones went 0.5 percent firmer at 32,036 points from trading. The broad S&P 500 climbed 0.9 percent to 3,998 points. The tech-heavy Nasdaq advanced 1.4 percent to 12,059 jobs.
Tesla attracts tech bargain hunters
A doubling of profits at US electric car maker Tesla has attracted bargain hunters, especially in tech stocks. The company’s earnings may have been a little better than feared, said J. Bryant Evans, investment advisor and portfolio manager at Cozad Asset Management. “We investors think that the technology sector in particular has fallen too much and that there may be some good opportunities there.”
Asian exchanges mixed
Meanwhile, Asian markets are on track for their best week in two months. The stock exchange in Tokyo is also stronger at the end of the week. The 225-stock Nikkei Index is up 0.5 percent shortly before the close. On the other hand, things are going down on the Shanghai stock exchange, the SSE Composite is currently down 0.3 percent.
Euro cannot hold gains
The day after the ECB decision, the European common currency is weaker again. The euro failed to hold onto gains, trading down 0.4 percent at $1.0183 in early forex trading. Yesterday the euro jumped up to $1.0276 for a short time after the ECB decision.
Major order for Siemens Energy
The energy technology group Siemens Energy has received a major order for the connection of several wind farms. In total, the lines should bring up to 1.8 gigawatts of power from the German North Sea ashore, as the company announced yesterday. This corresponds to the needs of 1.8 million people and is the largest order for offshore grid connection that Siemens Energy has ever received.
Infineon presents new chip for digital locks
A new chip from Infineon should enable digital locks without their own power supply. Instead of batteries or a power connection, the user’s mobile phone – which is also the key – supplies the energy to unlock the door. Both data and energy are exchanged via NFC – a process that is used, for example, for payment transactions via smartphone.
Frankfurt Airport expects a rush to start the holiday season
Frankfurt Airport is expecting more passengers at the weekend than it has since the outbreak of the corona pandemic in March 2020. According to the operating company Fraport, Germany’s largest airport expects up to 200,000 passengers on the last day of school before the summer holidays in three German federal states, as well as on Saturday and Sunday. There were not that many this year with a previous high of a good 180,000.