Market report
Status: 06.01.2022 10:29 p.m.
The good mood on the stock exchanges at the beginning of the new year is gone for the time being. Because of the renewed interest rate fears, the DAX ended its soaring. The hoped-for recovery failed to materialize on Wall Street either.
Is the weather on the stock exchange getting more changeable again? After the international stock markets were almost all uphill recently and new records were broken, things are now becoming more volatile. The Dow Jones, which slumped around two percent yesterday, fell again by 0.5 percent today. The broader S&P 500 closed slightly in the red. Strong incoming orders data from industry and weaker than expected ISM sentiment data from the service sector resulted in reluctance among investors.
Nasdaq sell-off stopped
The only bright spot: The recent sell-off on the Nasdaq has been stopped. The tech exchange closed almost unchanged, and for a long time it was even in positive territory. The “Big Techs” like Apple, Amazon and Microsoft, however, continued to be under pressure.
Black day for Europe’s tech stocks
Investors today avoided European technology stocks in particular. With a minus of 2.4 percent, the European industry index recorded the largest daily loss since the price slide after the appearance of the Omikron variant of the corona virus at the beginning of December.
First daily loss in the DAX 2022
The DAX experienced its first daily loss this year after climbing almost to a record high yesterday. The German benchmark index ended Xetra trading around 1.4 percent in the red at 16,052 points. It was only thanks to bargain hunters that the DAX maintained its position above the round mark of 16,000 points.
Faster interest rate turnaround than planned?
The Fed minutes released on Wednesday evening frightened European investors. Several Fed representatives emphasized that both economic and inflationary developments speak in favor of a faster exit from the loose monetary policy. A faster rate hike than previously expected could be justified, it said.
Fed could reduce total assets
Some Fed members also spoke out in favor of starting to reduce the central bank’s total assets shortly after the first rate hike. This would no longer replace expiring bonds, which should depress bond prices and increase yields accordingly. This, in turn, would make stocks less attractive compared to fixed income securities.
The end of the flood of money
So there were no gifts for investors on Epiphany. On the contrary: the US Federal Reserve signaled that it would withdraw liquidity from the market. The Fed minutes surprised the markets because they reveal a rather aggressive monetary policy view of the central bankers, said analyst Birgit Henseler from DZ Bank.
Federal bond yields at two and a half year high
Because of the threatened tightening of monetary policy in the US, investors threw government bonds from their portfolios. This drove the yield on landmark 10-year US Treasuries to a nine-month high of plus 1.751 percent. The ten-year German Bunds yielded minus 0.031 percent, as high as they were last two and a half years ago.
Inflation at 29-year high
The euro fell slightly and slipped below $ 1.13. German inflation rose 5.3 percent in December, its highest level since June 1992. Analysts had expected a slight decline after the monthly inflation rate jumped to 5.2 percent in November. For the year as a whole, the inflation rate was 3.1 percent, the highest level since 1993. “There is a risk that inflation will also become a persistent problem in Europe,” said Ulrich Kater, Dekabank’s chief economist. “If these signs intensify in the course of the year, the European Central Bank will have to tighten its monetary policy and also give priority to interest rate hikes.”
Industrial orders are picking up
Positive signals came only from industry. Thanks to good foreign demand, it recovered more strongly than expected from the previous collapse in orders in November. According to the Federal Statistical Office, the companies landed 3.7 percent more orders than in the previous month. Economists had only expected growth of 2.1 percent.
Kazakhstan protests drive oil prices up
Investors look to Kazakhstan with concern. The unrest there drove the oil price up again. The Brent variety from the North Sea rose by around two percent to $ 82.37 per barrel (159 liters). Kazakhstan produces 1.6 million barrels of oil a day.
Interest rate fantasies weigh on Bitcoin
Investors also withdrew from riskier investments such as cryptocurrencies for fear of rapidly rising interest rates in the US. Bitcoin fell at its peak by 2.7 percent to 42,413 dollars, the lowest level in almost five weeks, but recovered somewhat. “Turning off the tap makes crypto assets less attractive again,” stated Timo Emden from Emden Research. The prospect of a tighter monetary policy also made the “anti-inflation currency” gold less attractive. The precious metal fell one percent to $ 1,790 a troy ounce.
Corona winners on the sales lists
The biggest losers today were again the shares of the Corona winners. These have been suffering for a few days from the fact that, according to current studies, the omicron variant of the virus could lead to rather mild disease courses. In the DAX, the shares of the online retailer Zalando suffered significant losses with a minus of over four percent. The papers fell to their lowest level since August 2020.
The titles of the delivery service Delivery Hero even collapsed by five and a half percent and were the biggest loser in the DAX. They were at their lowest level since September 2020.
Merck acquires mRNA suppliers
The Darmstadt-based Merck Group wants to expand its mRNA technology business with a takeover. The DAX company has signed an agreement to purchase the US biopharmaceutical company Exelead. The purchase price is around 780 million US dollars (690 million euros). Exelead, based in Indianapolis, Indiana, USA. specializes, among other things, in lipid nanoparticles, a key component for mRNA therapeutics, which are also used in the fight against Covid-19.
Deutsche Bank confirms return target
Deutsche Bank sees itself on course for its key return target for this year. CFO James von Moltke told the “Handelsblatt” that he was “very confident” that the bank would meet the requirements it had set itself. “The target return of eight percent is our north star, the central orientation for the entire bank and the entire renovation.” Many analysts recently had doubts that Germany’s largest financial institution would achieve the target it had set for post-tax returns.
Million fine for Google and Facebook
France’s data protection authority has fined Google and Facebook millions. On their pages, users would not have been able to reject cookies as easily as they could accept, it said in the explanation. Two Google subsidiaries should therefore pay a fine of 150 million euros together. On Facebook it is 60 million euros.
The authority complained that on the google.fr, facebook.com and youtube.com pages, cookies could be accepted with just one click, but several clicks were necessary to reject them. This affects the freedom of consent and violates French law. The platform operators now have three months to adjust their handling in France. For each day of delay, 100,000 euros would be due.
Flatexdegiro crash
The online broker Flatexdegiro is aiming for further records in the new year after strong business growth in 2021. The number of customer accounts is likely to grow by 30 to 40 percent to 2.7 to 2.9 million. According to CEO Frank Niehage, the average customer is likely to act less on average in 2022 than last year. Overall, the number of transactions over the year should therefore only increase from 91 million to 95 to 115 million. On the stock exchange, the news was acknowledged with a price slide. For the Flatexdegiro share it went down by almost nine percent.
Amazon and Stellantis work together
Amazon secures a more prominent place in millions of future vehicles through a deal with the auto company Stellantis. The group with brands such as Peugeot, Chrysler, Fiat and Opel wants to embed Amazon’s voice assistant Alexa in its new digital cockpit, as the companies announced at the technology fair CES in Las Vegas. For the world’s largest online retailer, it’s a success in the race with the Google Assistant for a place in the car. The deal also advances the Amazon cloud service AWS, which the Stellantis vehicles will use.
Amazon will be the first to buy Stellantis’ Ram ProMaster electric delivery van, due to hit the market in 2023. The online retailer has so far relied primarily on the US start-up Rivian to electrify its fleet. Because of production problems, Amazon did not order its next delivery vehicles again from the electric car startup Rivian. Rivian’s shares plummeted seven percent.
Société Générale expands leasing business
The French bank Société Générale is repositioning its vehicle leasing and fleet management business with a billion-euro takeover. The fleet manager ALD Automotive, which belongs to the group, wants to take over the Dutch competitor Leaseplan for 4.9 billion euros. After the transaction, Société Générale will hold a little more than half of the shares in the merged leasing company, which will then manage 3.5 million vehicles. Most recently, the bank held almost 80 percent of ALD.