DAX expected to be negative: The worries continue

Wall Street in reverse

The specifications from overseas reflect the global uncertainty of investors in view of the crisis in Eastern Europe: The fear of an escalation weighed on Wall Street at the start of the week yesterday. The Dow Jones index closed almost 0.5 percent lower at 34,566 points after falling to around 34,300 points over the course of the year. The broader S&P 500 fell 0.4 percent to 4,401 points, while the Nasdaq index ended the session little changed at 13,790 points.

Initially, statements by the Russian Foreign Minister Sergey Lavrov, who suggested continuing diplomatic efforts to obtain security guarantees from the West, created a rather friendly atmosphere. Later, however, prices turned significantly negative after Ukrainian President Volodymyr Zelenskyj confirmed that next Wednesday had been given as the date for a Russian attack on Ukraine.

Asia stock exchanges different

The stock exchanges in the Far East are also affected by the possible war in Eastern Europe. The Japanese Nikkei index closed 0.8 percent lower at 26,865 points. The broader Topix index fell 0.3 percent. The Shanghai stock exchange was up 0.4 percent. The index of major companies in Shanghai and Shenzhen gained 0.7 percent.

Japan’s economy is not growing fast enough

The Japanese government announced today, based on preliminary data, that gross domestic product (GDP) rose by 1.3 percent in the fourth quarter compared to the previous three months, or by 5.4 percent on an annualized basis. Experts had expected a slightly stronger increase. In relation to 2021 as a whole, the world’s third largest economy, ahead of Germany, grew by 1.7 percent – and thus for the first time in three years.

Interest rate specter continues

In addition to concerns about a military conflict between Russia and Ukraine, the expectation of rising interest rates in the USA continues to be a negative factor. US Federal Reserve Banker James Bullard’s renewed call for a sharp rise in interest rates contributed to this. In his view, the Fed should raise interest rates by a full percentage point in the three meetings up to July 1st. That would mean that one of the three steps is at least half a percentage point. Most experts had not previously expected such a sharp increase.

Euro at 1.13, oil a little cheaper

On the foreign exchange market, the euro continues to have a difficult time against the dollar. In the morning, the common currency is trading at 1.1315, slightly below yesterday’s rates. Oil prices are also slightly below yesterday’s level. A barrel of North Sea Brent oil costs $94.74 in the morning. Speculations about supply disruptions drove prices yesterday to their highest level since October 2014. “Any disruption to oil flows from the region would push Brent and WTI prices well above the $100 mark,” said Nishant Bhushan, oil market analyst at Rystad Energy.

Airbus secures orders

Among the shares in the DAX, Airbus should be the focus. The European aircraft manufacturer has landed several major orders. The leasing company Aviation Capital ordered 20 short-haul aircraft of the type A220, as announced by Airbus at the air show in Singapore. Kuwaiti carrier Jazeera Airways converted an option for 28 A320neo aircraft into a firm order. At the same time, Airbus was optimistic about demand in the Far East. Over the next 20 years, more than 17,600 aircraft are expected to be sold in the Asia-Pacific region.

Facebook sued in the US

The US state of Texas is suing the network Facebook over its handling of biometric data from its users. The platform, operated by the Internet giant Meta, uses its facial recognition technology to collect the data of its users without their consent and thus violates data protection guidelines, according to the accusation. “This is another example of fraudulent business practices by big tech companies, and it needs to stop,” said Texas Attorney General Ken Paxton. No comment was initially available from Facebook.

Intel before billion takeover

The US chip group Intel is apparently on the verge of a multi-billion takeover in Israel. The “Wall Street Journal” reports that the possible purchase of Tower Semiconductor for almost six billion US dollars is about expanding the manufacturing capacities of the Americans. The deal could be announced this week. The production capacities for electronic chips are scarce in many areas worldwide, also due to high demand. Chip manufacturers and contract manufacturers are therefore investing more in the expansion of their systems.

Michelin as profitable as before Corona

In terms of profitability, the French tire manufacturer Michelin caught up with pre-Corona times last year. In 2021, sales climbed by 16 percent to 23.8 billion euros compared to the previous year. The operating result increased by almost 60 percent to 2.97 billion euros. Michelin sold around 12 percent more tires in 2021 than in the previous year and also benefited from price increases. The bottom line is that profits tripled to 1.85 billion euros.