market report
Status: 11/22/2022 07:38 a.m
After a weaker start to the week, the DAX should start trading with slight gains today. Above all, the corona situation in China gives investors food for thought.
The broker IG estimates the DAX 0.2 percent higher at 14,406 points before the start of trading. After weeks of rallying, the leading German index is currently struggling, because after an increase of almost 22 percent since the end of September, investors are now waiting for fresh impetus. Yesterday it closed down 0.4 percent to 14,380 points.
Smaller rate hikes hoped for
Perhaps the US interest rate policy will provide a tailwind: US Federal Reserve Banker Loretta Mester is in favor of smaller interest rate hikes starting next month. “I think we can go down from 75 (basis points) at the next meeting,” the president of the Fed offshoot told CNBC.
The Fed hiked its main interest rate by 0.75 percentage points for the fourth time in a row this month. Since then, several US central bankers have signaled that they favor smaller steps. A slower pace of US interest rate hikes would support the stock market.
“Interest rate expectations continue to be the focus of market activity and the recent numerous comments from ECB and Fed representatives clearly indicate that the interest rate hikes will be smaller again in the future,” commented Helaba’s experts.
China worries weigh on Wall Street
The Dow Jones index closed 0.1 percent lower at 33,700 points on Monday. The tech-heavy Nasdaq fell 1.1 percent to 11,024 points. The broad S&P 500 lost 0.4 percent to 3949 points. “People are really worried about the impact of the Chinese economy on the US economy,” said Hugh Johnson, chief economist at Hugh Johnson Economics.
Beijing’s most populous district urged residents to stay home on Monday as the number of coronavirus cases in the city surged. In the port city of Guangzhou, a district was cordoned off for five days. The fear of an economic slowdown is spreading.
Investors in Asia defy corona outbreaks in China
Investors in Asia are not discouraged today by the rising corona numbers in China and the renewed restrictions. China has been battling multiple outbreaks, from Zhengzhou in central Henan province to Chongqing in the southwest.
“The Covid situation in China is really a top priority in Asian trade,” said Redmond Wong of Saxo Markets in Hong Kong. The rise in cases at manufacturing sites could lead to further supply chain disruptions.
The Nikkei closed 0.6 percent higher at 28,115.74 points. The Shanghai stock exchange was up 0.8 percent. The index of major companies in Shanghai and Shenzhen gained 0.8 percent.
Musk plans no further job cuts at Twitter
According to a media report, Twitter’s new owner Elon Musk is not planning any further job cuts at the short message service. In fact, the company is hiring in marketing and technology, tweeted reporter Alex Heath from the technology portal The Verge. Immediately after the Twitter takeover in early November, Tesla boss Musk initially fired around 3,700 employees, around half of the workforce at the time, and then asked some of them to return. In the US, numerous executives have left the company.
Zoom lowers full-year revenue outlook
The US video service Zoom lowers its sales outlook for the full year. The company announced that falling demand for the video conferencing platform and increasing competition were causing problems for Zoom. In the third quarter, the company increased its sales by five percent to $1.1 billion. For some time now, Zoom has been facing stiff competition from Cisco’s WebEx, Salesforce’s Slack and Microsoft Teams, and Google Meet. During the corona pandemic, the company benefited from the trend towards flexible working between the home office and the office.