market report
As of: 10/27/2022 7:37 a.m
Investors are initially reluctant to make any commitments ahead of the ECB interest rate decision due this afternoon. The DAX should have a hard time adding to yesterday’s gains.
Monetary policy is once again in focus on the German stock market. The currency guardians around ECB boss Christine Lagarde will brace themselves against the record inflation in the euro area today with another XXL interest rate step. The market is firmly expecting a rate hike of 0.75 percentage points. The decisions of the Governing Council will be announced at 2.15 p.m.
The ECB is lagging behind in the global tightening cycle. Recently, speculation about a slowdown in interest rates at the US Federal Reserve gave a boost to share prices.
DAX downward trend is – still – intact
The DAX closed yesterday 1.1 percent higher at 13,196 points. This morning, however, he cannot initially build on this performance, the broker IG assesses the 40 German standard values at the hour 0.3 percent lower at 13,161 points. With the recapture of the psychologically significant 13,000 point mark, the DAX bulls had recently achieved an important stage victory.
From a technical perspective, however, a real game changer would have to be followed by subsequent gains, which would push the DAX past its downward trend since the beginning of the year (currently at 13,348 points). Anything below that is nothing but a countermove within the overall downtrend.
US tech stocks plummet
Mixed to negative specifications for today’s trading day come from Wall Street. Declines in profits at Microsoft and Google’s parent company Alphabet have weighed heavily on technology stocks on US stock exchanges yesterday. The index of the tech exchange Nasdaq fell by around two percent to 10,970 points. The broader S&P 500 lost 0.5 percent to 3830 points. The Dow Jones index of standard values closed little changed at 31,839 places.
Meta stock slump by the numbers
After the US stock market closed, the Facebook group Meta caused the next disappointment in the tech sector. The bottom line is that profits in the past quarter fell by 52 percent to around 4.4 billion dollars. The development of virtual metaverse worlds continues to devour billions with unclear prospects of success. The stock fell by around a fifth in after-hours trading.
Tonight, quarterly results from Amazon and Apple should provide further insight into the sensitivities of the US tech sector.
Asia stock exchanges with price losses
The stock exchanges in Asia cannot escape the guidelines from the USA and are also weaker in the morning. The Nikkei index, which comprises 225 values, was 0.2 percent lower at 27,379 points. The broader Topix index fell 0.5 percent to 1,908 points. The Shanghai stock exchange was down 0.1 percent. The index of the most important companies in Shanghai and Shenzhen lost 0.1 percent.
Euro holds above dollar parity
The euro is somewhat weaker against the dollar in Asian currency trading. One euro pays 1.0068 dollars. However, the European common currency is still above parity with the dollar, which it had regained over the course of the week. Market observers speak of an “anticipation effect”: The markets have already anticipated today’s rate hike by the ECB.
Daimler Truck is becoming more optimistic
In the DAX, the focus is on the Daimler truck share in the morning. After an unexpectedly strong third quarter, the truck and bus manufacturer has raised its financial targets for the full year. Earnings before interest and taxes in the group should now be slightly higher than in the previous year, according to the DAX group last night. So far, management has been aiming for a result at the previous year’s level.
Lufthansa expects high demand in winter
Despite increasing burdens for consumers and companies, Lufthansa expects strong demand for flights in the winter months. “The desire to travel and thus the demand for flight tickets continues unabated,” said Lufthansa boss Carsten Spohr. The passenger airlines planned in the fourth quarter with around 80 percent of the capacity of 2019, the year before the outbreak of the Corona crisis.
VW plans to launch ten new electric models by 2026
Volkswagen intends to launch ten new electric car models by 2026. This was announced by the head of the core VW brand, Thomas Schäfer, last night in Berlin. The portfolio should range from “entry-level e-cars with a target price of less than 25,000 euros to the ID.Buzz and the new flagship ID.Aero” in order to have a suitable offer in every segment.
VW and Ford end robot car project
The Volkswagen Group and its US partner Ford are withdrawing from the joint project involving robot cars at the software company Argo AI. The Wolfsburg-based company surprisingly announced last night that Volkswagen will no longer invest in Argo. The US automaker Ford is going out of business directly and booked a write-down of 2.7 billion dollars. This charge resulted in a net loss of $827 million in the third quarter.
Credit Suisse plans capital increase and job cuts
The crisis-plagued Credit Suisse is radically reorganizing its business and further reducing investment banking. In addition, the major Swiss bank is planning a capital increase with a volume of four billion francs, some of which will be subscribed to by professional investors such as the Saudi National Bank. As part of the restructuring, the traditional Zurich group is cutting 2,700 jobs in the current quarter. By 2025, the workforce is to be reduced to around 43,000 people from around 52,000 most recently.
Samsung with sharp drop in profits
Electronics giant Samsung earned significantly less in the third quarter of 2022 given falling demand for memory chips. The South Korean company announced today that the surplus fell by 23.6 percent year-on-year to 9.39 trillion won (about 6.6 billion euros). In particular, the weakness of the PC market and the likewise falling demand for mobile devices and televisions had an impact on the chip business.