market report
Status: 08/30/2022 4:16 p.m
After a lot of sadness recently, investors are now using the fallen prices to get started. The signs of easing in energy prices are helping here. But it is too early to give the all-clear.
In a countermove to the recent losses, investors are now turning to equities again. The DAX rises above the 13,000 point mark again. At its peak, the leading index climbed to 13,154 points. However, the profits are currently crumbling again – the index cannot maintain this level and is struggling again with the round mark. The daily low so far was 12,919 points.
At the start of trading, Wall Street is also going uphill, albeit not as turbulently as in this country. The leading index Dow Jones gained a moderate 0.2 percent, the technology exchange Nasdaq almost half a percent. The daily trend is not set in stone, the direction could also turn.
According to stockbrokers, much more than a certain recovery in an overall gloomy environment cannot be expected. “Central banks have made it clear that fighting high inflation is their top priority,” said market analyst Craig Erlam of broker Oanda. A so-called hard landing, i.e. accepting a recession, could be the price that has to be paid for it.
Inflation data speak a clear language
However, higher German inflation figures are taking a back seat today, at least in the short term. The message of the latest data is clear. Then in August, the inflation rate rose significantly to an estimated 7.9 percent, as the Federal Statistical Office announced today. In June and July, the fuel discount and nine-euro ticket dampened inflation somewhat, at 7.6 and 7.5 percent. Both relief measures are now being phased out – experts are expecting double-digit inflation rates in the fall.
Which increases the pressure on the ECB to respond with significant rate hikes on September 8th. An increase of 75 basis points is currently considered possible on the market, 50 basis points have already been firmly calculated.
August was probably just “the overture to a hot autumn of inflation,” explained LBBW analyst Elmar Völker. In September, the expiry of the tank discount and nine-euro ticket will have a price-boosting effect, followed by the gas surcharge in October.
Bundesbank President Joachim Nagel warned of an increase in the inflation rate last week ten percent warned in the autumn months. Double-digit inflation rates were last measured in Germany more than seventy years ago; in the fourth quarter of 1951, according to the calculations at the time, it was eleven percent, as Nagel told the “Rheinische Post”.
Energy prices are falling
However, profit-taking on the energy market, the main driver in the current inflation scenario, is helping to ease the situation on the stock exchange. The European natural gas future fell by almost one percent to 265 euros per megawatt hour and was thus more than 20 percent below its record high on Friday. On the most important European trading platform TTF, the price for one megawatt hour of natural gas has fallen by almost a third to around 250 euros since the end of last week.
The sales were triggered not only by the surprisingly high filling levels of the gas storage facilities in Germany, but also by reports that the federal government might agree to a gas price cap. The analysts at EnergyScan, the data provider of the utility Engie, wrote that investors with a speculative orientation in particular are now exiting the market so as not to have to sell at a loss after the price limit has been introduced.
Oil prices drop a bit
After the rally at the start of the week, oil prices are also falling again. Investors fear that more aggressive rate hikes by central banks could lead to a global economic slowdown and hurt demand for commodities.
Fewer supply bottlenecks in the industry
German industry is sending out positive signals for the economy: Complaints about a lack of preliminary products and raw materials were fewer in August than they have been for a year. 62 percent of the companies reported bottlenecks, in July it was 73.3 percent, as the Munich ifo Institute announced today.
“Unfortunately, we cannot yet speak of a lasting relaxation,” said Klaus Wohlrabe, head of the ifo surveys. “The decline is still too small to trigger a significant stimulus in industrial production and thus boost the economy.”
Euro rises above parity to the dollar
The euro rose slightly until the afternoon. At the moment, the common currency costs 1.0020 US dollars. It is therefore slightly above parity with the US currency. Inflation expectations also play a role here. Should the ECB be forced to raise the key interest rate more significantly than expected, this would have a supportive effect on the common currency. Experts also attribute the recovery to the noticeable fall in European gas prices.
US data in focus
Before the much-noticed ISM sentiment index for industry attracts attention in the USA on Thursday and the labor market report for August on Friday, data from the private research institute Conference Board on consumer confidence in August will be available this afternoon. Sentiment should have improved compared to July – at least that’s what is expected.
Headwinds for utility stocks
RWE shares are last in the DAX. Competitor E.ON is doing a little better, but is also lagging behind the market. Papers from the wind farm operator Encavis are also significantly weaker in the MDAX with a minus of a good 1.3 percent, while the index of medium-sized stocks is up around 0.9 percent. Market observers referred to the debate about the regulation of electricity prices.
Less Russian natural gas for France
The French energy company Engie says it will get less gas from Gazprom. The Russian gas company has announced that it will reduce deliveries from today, Engie said. Reason are differences of opinion about the interpretation of some contracts. Nevertheless, Engie does not see the supply of its customers in danger. Natural gas prices barely reacted to the announcement from Russia.
Big losses at Adler
The ailing real estate group Adler Group has in the first half of the year due to impairments written in red. The bottom line is that the loss added up to 604 million euros, as the company announced late Monday evening. The search for an auditor for the 2022 annual accounts continues. The share is at the bottom of the SDAX.
Porsche SE shares in high demand
The papers of Volkswagen’s major shareholder Porsche SE are in high demand. Investors continue to look positively at the planned IPO of the VW sports car subsidiary Porsche AG. The background is speculation about the valuation of the stock market candidate. Last Friday, the Bloomberg news agency reported, citing people familiar with the matter, that the VW sports car subsidiary was valued at between 60 and 85 billion euros by interested parties.
Toyota disappointed
At 706,547 vehicles, global vehicle production by the Japanese carmaker Toyota in July fell short of the original plans of around 800,000 units. This means a decline of 8.6 percent compared to the same period last year. Toyota missed its production target for the fourth month in a row.