market report
Status: 09/09/2022 10:16 p.m
The major US stock indices ended the week with comfortable gains. Some investors grabbed shares at a lower level again.
All major Wall Street stock indices ended the weekend with significant gains. Above all, on the Nasdaq technology exchange, prices rose particularly strongly by 2.11 percent, the Nasdaq 100 selection index gained 2.17 percent and closed at 15,588 points.
But the Dow Jones, the leading index for standard stocks, also advanced significantly by 1.19 percent to 32,151 points. The market-wide S&P 500 index, which includes both standard and technology stocks, rose 1.53 percent to 4,067 points.
Bargain hunters on the go
The worries about inflation, which had been dominant in the last few weeks, receded somewhat into the background today, so that, according to traders, bargain hunters have now come to the scene and have used the supposedly favorable prices to get started. After the strong sell-off in the last few weeks of August, a catch-up race is now underway, said trader Dennis Dick from broker Triple D Trading.
Despite the relaxation today, US investors’ attention is still primarily focused on the central banks’ fight on both sides of the Atlantic against high inflation. In the USA, economist Ralfcircul from Helaba sees a chance of a turnaround in inflation. However, if inflation continues to be high, there is still no reason for the Fed to back away from the aggressive turnaround in interest rates, he said. Fed Chair Jerome Powell recently announced further tightening.
Next week’s inflation data should point the way ahead, providing an indication of the pace of rate hikes by the US Federal Reserve. August consumer prices are expected on Tuesday. Analysts at Commerzbank expect high inflation to ease off for the second time in a row.
Tesla builds battery factory
Among the individual values, Tesla made a positive impression. Investors are reacting positively to the electric car maker’s plans for its own lithium refinery in Texas. The shares gained 3.6 percent. The potential plant on the coast of the US state will process the metal required for car batteries. Tesla would thus ensure the supply of one of the most important components for vehicle construction.
DAX on the up again
A day after Record rate hike by the European Central Bank and the pessimistic economic outlook from ECB boss Christine Lagarde, the mood on the German stock market was much better again.
During the course of the day, the DAX passed the 13,000 point mark and ended trading 1.4 percent higher at 13,088 points. The daily high was 13,121 points. In a weekly comparison, the leading German index managed a small plus of 0.3 percent. Only yesterday afternoon, following a pessimistic economic forecast by ECB boss Christine Lagarde, it was not looking like such a recovery at all.
ECB takes the initiative
The effects of the interest rate hike by the ECB remained “manageable” on the stock market, as market observer Thomas Altmann from asset manager QC Partners noted. Ultimately, the step was expected. Some investors even consider it positive that the ECB, after much hesitation, has now taken up the fight against inflation. Nevertheless, it lags far behind the US Federal Reserve in the interest rate cycle. Further rate hikes by the European currency watchdogs are therefore likely to follow.
“Inflation remains unacceptably high,” said Slovakia’s central bank governor Peter Kazimir in a commentary published on the bank’s website today. “The priority now is to vigorously continue the normalization of monetary policy.” His ECB Council colleague Klaas Knot, the central bank chief of the Netherlands, made a similar statement. Even if this slows down economic growth, the path taken must be maintained.
China data help
According to stockbrokers, new economic data from China, where producer and consumer prices rose less than expected in August, also had a supportive effect before the weekend. This fueled hopes that the government in China could stimulate the economy without having to worry about inflation. The figures from China also contributed to the good mood in New York trading.
Bank shares asked after ECB decision
In an environment of rising interest rates, banks were among the natural winners: the lending business became more lucrative and income increased. Across Europe, the sector index Stoxx Europe 600 Banks was again among the best sectors. In the DAX, Deutsche Bank shares rose by more than three percent. In the MDAX, Commerzbank shares rose to their highest level since the end of June; in the end they increased by 3.8 percent.
Euro again well above dollar parity
In the wake of the ECB’s decision, the euro showed strength in FX trading today. The European common currency surged above parity against the dollar and is trading at $1.0040 in US trade. Parity is a one-to-one exchange rate between two currencies.
“The interest rate differential against the US dollar has now narrowed,” notes IG market analyst Salah-Eddine Bouhmidi. “However, the Fed meeting is already in two weeks and could put pressure on the euro again.”
Oil prices on the rise again
Oil prices were also able to benefit from the weaker dollar and investors’ growing appetite for risk. A barrel (159 liters) of the North Sea Brent was traded 3.5 percent higher in the evening. Midweek oil prices had fallen to multi-month lows. While a barrel of Brent cost the lowest price since February, a barrel of WTI has at times cost less than it has since January.
Bitcoin reclaims $20,000 mark
After the price losses of the past few weeks, investors stocked up on Bitcoin again. The cyber currency increased in price by around ten percent to over 21,000 dollars. “Bargain hunters are on the prowl again,” said Emden Research analyst Timo Emden. “It remains to be seen whether the recovery attempt will be sustainable.”
Gas importer VNG in financial difficulties
The focus today was on VNG. The third largest German gas importer got into financial difficulties during the energy crisis. The company, a majority holding of the Karlsruhe energy supplier EnBW, presented submitted an application for state aid to the Federal Ministry of Economics today. According to the information, the Leipziger Verbundnetzgas AG (VNG) is the third largest German gas importer and in 2021 accounted for around a fifth of the gas requirements in this country. EnBW shares then went on a roller coaster ride, but ultimately closed 1.2 percent higher.
Falling gas prices boost Uniper shares
Slacking gas prices brought some relief to Uniper shareholders. The papers of the ailing power plant operator returned with a jump of 11.5 percent back above the five euro mark. It was only on Wednesday that they had marked their record low of EUR 4.19. The price of the TTF futures contract for Dutch natural gas fell back today and remained close to the EUR 200 mark.
Fresenius is enthroned at the top of the DAX
In the DAX, the Fresenius share was the biggest gainer with an increase of around four percent. An analyst at the French bank Société Générale considers the paper to be “surprisingly mispriced”, with the business prospects not being adequately taken into account. The expert reiterated his buy recommendation and underpinned it with a target price of EUR 92 – almost four times the current share price.
Telekom sought after T-Mobile US share buyback
The T-Share was one of the strongest stocks in the DAX today. Because prospective share buybacks by the Telekom-US subsidiary T-Mobile US were well received by investors. With the planned purchase of its own shares worth up to 14 billion US dollars within twelve months, the US subsidiary could help its mother to achieve the long-awaited majority of shares. According to a retailer, the announcement is positive, even if the scope did not quite meet expectations. So far, however, it is not yet known how Telekom will behave in the course of the measure.
According to Bernstein analysts, the share could reach the 50 percent threshold in the third quarter of 2023. When shares are retired, the number of all outstanding shares decreases. If Telekom does not sell any shares, its stake will automatically increase.
BMW announces batteries with significantly more power
BMW wants to significantly improve the range and charging time of its electric cars from 2025 with new battery cells and halve the manufacturing costs of the batteries. Development board member Frank Weber said today: “The energy density is increased by more than 20 percent, the charging speed is increased by up to 30 percent and the range is improved by up to 30 percent.” In addition, the CO2 emissions during cell production are reduced by up to 60 percent.
Formula 1 entry of Porsche with Red Bull burst
The VW subsidiary Porsche and the Red Bull racing team have theirs Formula 1 plans buried. Talks have been held over the past few months. “Both companies have jointly come to the conclusion that these talks will not be continued,” said Porsche. The premise was always a partnership at eye level, which would have included the team in addition to an engine partnership. “This could not be realized.”
Airbus delivered fewer machines in August
The world’s largest aircraft manufacturer Airbus has to continue to worry about its annual target after declining deliveries in August. In the past month, only 39 commercial aircraft found their way to customers. In the first eight months, the manufacturer has delivered 382 machines. That’s just a little more than half of the 700 jets that CEO Guillaume Faury announced at the end of July as the new delivery target for the current year.
Citi wins wire transfer litigation
The major US bank Citigroup has prevailed in the legal dispute over the reimbursement of around half a billion dollars that was accidentally transferred. A Manhattan appeals court overturned the lower court’s verdict and ruled that the financial group was entitled to the money. The recipients should have been aware that the transfer was a glitch, the judges reasoned.
Poland wants to buy military helicopters from Boeing
To further strengthen its army, Poland plans to procure a larger number of US-made military helicopters. Defense Minister Mariusz Blaszczak announced yesterday that Warsaw has submitted a request to the US to purchase 96 Apache attack helicopters. The manufacturer of the Apache attack helicopters is the US company Boeing.