market report
Status: 01/18/2023 09:45 a.m
At the start of trading, the leading German index is struggling to maintain yesterday’s closing level. Weak specifications from the USA are a burden. But the business results of the German group are not convincing either.
The DAX started trading midweek just below yesterday’s XETRA close. With currently 15,180 points, the index is now 0.1 percent down, but is still keeping the round mark of 15,000 points at a distance for the time being.
Update economy from 01/18/2023
Klaus-Rainer Jackisch, HR, 18.1.2023 9:47 a.m
Balance sheets have to be right
In view of recent significant gains on the stock markets, experts are warning of the risk of a correction. The reporting season, which is now also starting in Germany, is all the more important, says Thomas Altmann, portfolio manager at QC Parters, “because the prices, which have already risen significantly, now have to be justified retrospectively with increases in profits”.
Different specifications from overseas
Disappointing quarterly results from major US banks spoiled Wall Street investors’ mood in the evening. The Dow Jones index closed 1.1 percent lower at 33,910 points. The technology-heavy Nasdaq managed a plus of 0.1 percent to 11,095 points. The Japanese Nikkei Index, on the other hand, closed 2.5 percent higher at 26,791 points. In Japan, the Bank of Japan’s decision to maintain ultra-low interest rates was welcomed.
Euro turned up again
On the foreign exchange market, the euro briefly left its upward trend of the past few days and slipped below the 1.08 mark. Meanwhile, the European common currency is back to yesterday’s level at $1.0822.
oil price rises
The easing of the once strict corona regulations in China continues to provide confidence in the oil market. Market participants are hoping for a noticeable economic recovery in the world’s second largest economy, which could also have an impact on the global economy and overall energy demand. A barrel of North Sea Brent currently costs around $87.
Less construction in Germany
The decline in building permits for apartments in Germany has continued. According to the Federal Statistical Office, the construction of 24,304 apartments was approved in November, a good 16 percent less than in the same period last year. The number of building permits is an important indicator in view of the housing shortage in many cities and the construction industry.
BASF share under pressure
In the DAX, the chemical company’s shares initially lost significantly, but then leveled off at minus 1.5 percent. BASF surprisingly slipped into the red last year due to write-downs on the Russian business of its oil and gas production subsidiary Wintershall Dea. According to preliminary figures, the bottom line is a loss of around 1.4 billion euros, as BASF announced last night.
Auto industry in the sales crisis
Auto shares are also mostly weaker in the morning. New car registrations in the European Union last year were the lowest they have been in almost 30 years, despite a final spurt in the large markets of Germany and Italy at the end of the year. In the year as a whole, 9.26 million cars were registered, 4.6 percent fewer than in the already weak previous year – and thus fewer cars than at any time since 1993.
Bayer takes over AI specialists
Bayer is expanding its radiology business with the acquisition of a specialist in automated image recognition. According to a statement on Wednesday, the pharmaceutical and agrochemical group is buying UK and US-based artificial intelligence (AI) specialists Blackford Analysis. The two companies had already joined forces in a development cooperation at the end of 2020, as a result of which Bayer brought an image processing platform onto the market in 2022. Nothing was known about the purchase price.
Conti has a margin problem
The auto supplier Continental also presented business figures in the evening. According to preliminary figures, Continental increased its sales by around 17 percent to 39.4 billion euros last year. However, the profit margin before interest and taxes adjusted for special effects was expected to be 5.0 percent, 0.6 percentage points below the previous year’s figure. Continental had warned early on that additional costs for energy, freight and material would run into the billions.
Microsoft before mass layoffs?
According to a media report, Microsoft wants to lay off five percent of its workforce. This would correspond to around 11,000 jobs, the Sky News broadcaster reported yesterday. Initially, no statement was available from the US software company. The company plans to present its quarterly figures on January 24th. Rising inflation and the looming recession are troubling the tech industry.
Barry Callebaut with sales down
The aftermath of a production disruption at a key plant slowed chocolate maker Barry Callebaut in the first quarter of fiscal 2022/23. The sales volume fell by 5.1 percent, as the Swiss company announced today. Thanks to price increases, however, sales in local currencies climbed by 7.2 percent to CHF 2.11 billion.