market report
Status: 03/24/2022 08:03 a.m
The persistently high oil price and fears of the economic consequences of the Ukraine war are forcing investors to exercise restraint. NATO, G7 and EU are discussing further consequences for Russia today.
Experts assume that the DAX will tend to start trading somewhat more firmly today. Yesterday, the leading German index lost 1.3 percent to 14,284 points. The 14,500 point mark remains a tough test for investors. A major negative factor recently was the prospect of further rising inflation.
Statements by Russian President Vladimir Putin, according to which “enemy states” should pay for natural gas in rubles in the future, had dampened the mood. Experts now fear an escalation in the “economic war”.
Mixed specifications
In the US, investors had also cashed in after the recent price gains. The US standard value index Dow Jones closed 1.3 percent lower at 34,358 points. The tech-heavy Nasdaq fell 1.3 percent to 13,922 points. The broad S&P 500 lost 1.2 percent to 4456 points.
Wall Street is also concerned about inflation and its consequences: “Inflation is very high,” said Andrea Cicione, chief investment strategist at research house TS Lombard. “Therefore, if the Fed tightens too aggressively and the economy plunges into recession, the risk of policy mistakes increases.” In Japan, the Nikkei rose 0.3 percent in the morning to 28,110 points.
Oil remains really expensive
Meanwhile, the oil price remains at a high level. The price of a barrel (159 liters) of the WTI rose slightly to $114.5, Brent is approaching the $122 mark. Since the start of the week, oil prices have been moved by speculation about new sanctions against Russia, which could also affect oil trading.
The heads of state and government of the seven largest industrialized countries (G7) and the NATO members are meeting today. The discussions are likely to revolve around a European import ban for Russian oil. However, a rapid embargo seems unlikely, said Commerzbank analyst Carsten Fritsch.
“There is still considerable resistance in some EU countries that are highly dependent on Russian oil. However, a further escalation of the Russian warfare in Ukraine against the civilian population there could still persuade these countries to give in.”
How is the economy doing?
On the futures side, the purchasing manager indices for manufacturing and the service sector will be published in the morning. The experts at Helaba write that they are being followed with great interest against the background of the Ukraine war and its economic consequences. “We consider a significant deterioration in sentiment in the manufacturing sector to be likely. Service companies are also likely to be less optimistic about the future – especially since the high corona infections and incidences are causing uncertainty.“
Durable goods orders are on the agenda in the US. Analysts are predicting a 0.5 percent decline in February.
Largest gas storage operator Uniper criticizes draft law
Germany’s largest gas storage operator Uniper has criticized the draft of the planned gas storage law. The company said it makes sense to create a legal basis for appropriate minimum fill levels. “However, from our point of view, the regulations in the proposed law will make the storage business less attractive for the participating trading companies.” “The future operation of the gas storage facilities in Germany would be jeopardized as a result.”
The energy group Uniper accounts for around a quarter of Germany’s storage capacity. The federal government wants to ensure by law that the operators of gas storage facilities guarantee certain fill levels on four key dates each year. The specifications are intended to secure the gas supply and curb price fluctuations.
Court defeat costs Credit Suisse hundreds of millions
Credit Suisse has suffered a legal defeat in Bermuda. A court there will soon publish “a negative verdict” against the local insurance subsidiary Credit Suisse Life Bermuda, the bank said. According to the announcement, it is about “possibly more than 500 million US dollars”.
In the past, provisions had been made in this matter, it said. However, it is now being examined whether further provisions should be made. In addition, the bank stated that it intends to “pursue all available legal measures”.
Google pilot project allows Spotify its own payment system
Alphabet subsidiary Google says the company will allow Spotify to use its own payment system in its Android app. The new pilot project is intended to counter app makers’ concerns about high fees and alleged anti-competitive behavior on the part of Google. In some countries, users who have downloaded Spotify from the Google Play Store will be given the choice to pay with either the Spotify payment system or Google Play Billing in the coming months.