Market report
Status: 07/15/2021 8:02 a.m.
At the start of trading on the Frankfurt Stock Exchange there will probably not be any big jumps again. Rather, an asserted price level would be a surprise.
The unofficial early trading before the actual stock exchange opening in Frankfurt indicates that the opening of trading has hardly changed. The indications of various banks on the DAX are in the range of 15,765 points and thus 0.2 percent lower than yesterday at the close of trading in electronic Xetra trading. This means that the leading German index continues to find it very difficult to sustainably break the 15,800 point mark.
“What we are seeing at the moment is a summer slump in sales,” said market expert Thomas Altmann from QC Partners. “For me, such extremely low turnover is a big warning signal. Hardly anyone wants to buy at the current price level. So the prices only stay at the high level as long as nobody wants to sell.”
Inconsistent share price development overseas
The Japanese stock exchange is going down sharply. Shortly before the close of trading, the Nikkei index, comprising 225 values, is one percent lower at 28,321 points.
The stock market in Tokyo is once again developing more negatively than its counterparts in the USA. The Dow Jones Industrial Average gained 0.1 percent to 34,933 points yesterday. The broad S&P 500 gained 0.1 percent to 4374 points. On the technology exchange Nasdaq, the composite index fell 0.2 percent to 14,644 points.
The Fed is calming the markets
At a hearing in front of Congress yesterday, US Federal Reserve Chairman Jerome Powell emphasized that the inflation rate, which is currently well above the Federal Reserve’s target of two percent, is temporary and will give way “in the coming months”. In addition, the labor market is still “a long way” from the level at which the central bank will cut back monetary policy support for the economy. The yield on ten-year government bonds fell to 1.35 percent and was thus even further below the annual high of 1.78 percent. This shows that the market is following the Fed.
“There was a tug-of-war in the market between concerns about high inflation and concerns about tightening monetary policy,” said Randy Frederick, manager at brokerage firm Charles Schwab. “As long as Fed Chairman Jerome Powell says he won’t raise rates, stock markets will do well.”
On the foreign exchange market, the balance of power between the euro and the US dollar is roughly balanced in the morning. The euro is almost unchanged at around 1.1830 US dollars.
China is growing strongly
The Chinese economy once again grew significantly in the second quarter. The second largest economy grew by 7.9 percent year-on-year from April to June, according to the Chinese statistical office.
Daimler much better than expected
Daimler defied the lack of chips in the second quarter and clearly exceeded the expectations of the analysts. Thanks to increasing sales, higher prices and savings, the group generated earnings before interest and taxes (EBIT) of 5.19 billion euros, as the car and truck manufacturer announced last night. Analysts had expected the Stuttgart based on average only 4.1 billion euros. In the same period of the previous year, the group had reported a loss of 1.68 billion due to the economic effects of the pandemic.
Siemens Energy is rowing back
After renewed problems with the Spanish subsidiary Siemens Gamesa, Siemens Energy warns of worse than expected business results. Because the wind turbine manufacturer has to reckon with operating red numbers in the current 2020/21 financial year, the parent company from the DAX will not achieve its earnings target either. The operating return on sales before special items will probably be below the targeted range of three to five percent in 2020/21, the energy technology group admitted yesterday evening. However, sales should increase by three to eight percent as planned; Siemens Energy had already warned here three months ago.
Novem comes for 16.50 euros
The automotive supplier Novem will feel the current weaker environment with its planned IPO. The issue price for the Novem share was set at 16.50 euros, as the company announced. The price is thus at the lower end of the price range, which had gone up to 19.50 euros. The first trading day in the regulated market of the Frankfurt Stock Exchange in the Prime Standard is planned for July 19.