market report
Status: 04.11.2022 07:30 a.m
The DAX could recover a small part of its recent losses today. However, the prospects for risky assets such as equities have clouded over noticeably since the last Fed meeting.
Some calm returned to the German stock market at the end of the week. The DAX should start the last trading day of the week with slight price gains. The broker IG assesses the German standard values at the hour 0.4 percent higher at 13,188 points. However, this is likely to be primarily a technical counter-reaction to the recent price losses.
DAX loses over 400 points
On Tuesday, the DAX had reached 13,444 points, its highest level since mid-September. Since then he has lost more than 400 points at the top. Only yesterday at a low of 13,023 points did the leading German index turn around. However, the DAX remains technically ailing, having now fallen back into its old downward trend since the beginning of January.
Fed spoils the mood
The prospects for shares had also recently clouded over fundamentally. Fed Chairman Jerome Powell dashed investors’ hopes of a short-term turnaround in interest rate policy in the middle of the week. He said it was “very premature” to think about a pause in rate hikes. Investors are now pricing in a 5 percent rate hike by the US Federal Reserve next year.
Wall Street is hit by shattered interest rate hopes
The shattered hopes of smaller rate hikes by the major central banks sent Wall Street plummeting yesterday. The Dow Jones index of standard values closed 0.5 percent lower at 32,001 points. The tech-heavy Nasdaq fell 1.7 percent to 10,342 points. The broad S&P 500 lost 1.1 percent to 3719 points.
Economic boom at the end of the week
On the last trading day of the week, there are still a few economic dates on the stock exchange agenda: In addition to incoming orders from industry in Germany, the purchasing manager indices for Germany and the euro zone in particular deserve attention as an important leading economic indicator. The eurozone producer prices due at 11 a.m. should allow conclusions to be drawn about the development of inflation. Finally, at 1:30 p.m. comes what is probably the most important economic date: the US labor market report for October.
Nikkei index closes deep in the red
The Tokyo stock exchange was weaker at the end of the week. The Nikkei Index, which comprises 225 stocks, closed 1.7 percent lower at 27,200 points. In contrast, the Chinese stock exchanges recorded price gains: the Shanghai stock exchange was up 1.7 percent. The index of major companies in Shanghai and Shenzhen gained 2.3 percent.
Euro is making up some ground
At the end of the week, the euro started a gentle countermovement and rose by 0.3 percent to $ 0.9779. The prospect of more and collectively higher interest rates from the Federal Reserve has helped the dollar have its best week in more than a month.
Vonovia expects a slight decline in earnings in 2023
In the DAX, the focus is on the Vonovia share. Germany’s largest real estate group is cautious for the coming year. In 2023, the operating result – measured by the FFO indicator, which is important for the real estate industry – is likely to decline slightly due to interest and tax developments, the company announced this morning.
Freenet is getting a little more optimistic
After good business up until the end of September, the mobile communications provider Freenet is becoming somewhat more optimistic again. The MDAX group now expects earnings before interest, taxes, depreciation and amortization (Ebitda) to reach the upper end of the targeted range of between EUR 470 million and EUR 480 million after EUR 447 million in the previous year. Freenet only raised the forecast slightly in the summer.
Amazon stops hiring
The world’s largest online mail order company Amazon does not want to increase its number of employees in view of the risks of inflation and recession for the time being. Amazon manager Beth Galetti announced yesterday that the group’s management had decided to take a hiring break for the coming months because of the uncertain economic situation and the many employees hired in recent years.
Job cuts at Uber rival Lyft
The US ride-hailing service Lyft has announced job cuts as part of a larger austerity plan in the face of inflation and recession concerns. 13 percent of the employees – around 683 employees – are to be laid off, as the Uber rival announced yesterday. “We are not immune to the realities of inflation and economic downturn,” company founders John Zimmer and Logan Green wrote in a memo to employees.
Starbucks with record sales and slump in profits
Despite higher prices, Starbucks remains in demand – the world’s largest café chain achieved record sales in the summer. In the fiscal quarter through early October, revenue increased 3 percent year over year to an all-time high of $8.4 billion. However, increased expenditure for higher wages, for example, caused profits to fall sharply. The bottom line is that Starbucks made $878 million — about half what it was a year ago.
Amgen ends quarter surprisingly well
Thanks to strong drug sales and successful cost control, the US biotech group Amgen has earned and implemented more than experts had expected. Revenue fell 1 percent to $6.7 billion in the third quarter. Adjusted earnings per share (EPS) jumped 15 percent to $4.70. Analysts had only expected $6.56 billion or $4.44.
Twitter begins layoffs
The short message service Twitter has temporarily closed its offices and announced numerous layoffs. In an e-mail, the US company informed its employees that the offices were locked and could no longer be entered. On Friday at 9 a.m. local time, they would be informed by email whether they were affected by any layoffs. The new Twitter boss Elon Musk had previously announced significant savings.