market report
Status: 08.07.2022 18:03
On the Frankfurt stock market, the optimists got the upper hand on the last trading day of the week. The DAX recorded strong price gains, despite certain interest rate concerns in America.
The DAX closed at 13,015 points, up 1.3 percent. On a weekly basis, the increase is one and a half percent.
“Even if some other US economic indicators had weakened recently, the job market remained robust in June. There is no sign of an impending recession,” commented economist Christoph Balz from Commerzbank on the data from the USA. Nevertheless, in the wake of such good news, the probability of further strong interest rate hikes by the US Federal Reserve is increasing.
More work than expected
The US economy has in June significantly more jobs created than expected. The Ministry of Labor announced that 372,000 jobs had been added outside of agriculture. On average, analysts had only expected 265,000 new jobs. As expected, the unemployment rate stagnated at 3.6 percent. As expected, wage growth also weakened slightly.
Gas crisis remains in the focus of investors
Nevertheless, it remains to be seen how long the positive mood will last. The shutdown of the Nord Stream 1 gas pipeline for maintenance is scheduled to begin next Monday.
“Only after the end of the scheduled maintenance work on July 21 could it be a little clearer whether people and the economy in Germany have to prepare for a hard winter,” warns Jürgen Molnar, capital market strategist at RoboMarkets. “The uncertainty about this should have a significant impact on stock market activity in Frankfurt over the next two weeks.”
If its repaired gas turbine returns from Canada, Russia allegedly wants to restart energy supplies through the throttled Nord Stream 1 Baltic Sea pipeline. “If the turbine comes after the repair, it will allow for an increase in volume,” Kremlin spokesman Dmitry Peskov said, according to the Interfax agency.
At the Dutch gas trading point TTF, the upward trend in prices has stopped today. In the afternoon, the quotations for the next six months were clearly in the red, but at around 170 euros per megawatt hour, they were about twice as high as a month ago.
Uniper calls for the state
The energy company Uniper, which is in financial difficulties, has submitted an application to the federal government for stabilization measures. As the company announced, these measures are aimed, among other things, at “ending the current accumulation of significant losses” and “covering Uniper’s liquidity needs”. Uniper was already in talks with the federal government about aid measures.
Uniper’s proposal also provides for the federal government to take a relevant stake in the company. In addition, the energy company wants to be able to pass on price increases to customers.
Euro on the way to parity
The euro temporarily fell to another 20-year low against the US dollar. The European common currency was up at $1.0072 in the morning. By the afternoon, the euro had recovered and climbed toward $1.02. It was back to where it was in early trading.
With the downward slide in the past week, the euro has increasingly approached parity with the dollar – i.e. a one-to-one exchange ratio. The last time the euro-dollar exchange rate was at this level was in 2002. That was shortly after the introduction of the euro as cash. The reasons for the weakness of the euro are fears of an energy crisis in Europe and the ECB’s relatively restrained fight against high inflation.
Porsche SE and VW preference lead the DAX
Securities from the holding company Porsche SE and preferred shares from Volkswagen took the lead in the DAX. Apparently, the VW subsidiary Porsche AG is making progress with its IPO. According to a report by the Bloomberg news agency, VW has selected additional syndicate banks for the IPO of the sports car subsidiary. The IPO process could start in September and the initial listing could take place in October.
Bayer/BASF: New uncertainties about dicamba
In a US lawsuit against Bayer and BASF over the herbicide dicamba, the penalty of up to now 60 million dollars has to be renegotiated. A federal appeals court found that the sum should have been determined separately for the two pharmaceutical companies and not together. More than 100 lawsuits have been filed in connection with dicamba.
TAG shares suffer from capital increase
Shares in TAG Immobilien were under pressure due to a capital increase that had been decided. Shareholders are given the right to purchase 20 new shares for every 101 existing shares at a subscription price of EUR 6.90 per share. The measure, which comprises almost 29 million shares and is worth around 200 million euros, serves to refinance the takeover of the Polish company Robyg.
Eurowings increases prices by at least ten percent
The Lufthansa offshoot Eurowings wants to increase ticket prices by at least ten percent due to increased energy costs. That said the chairman of the board, Jens Bischof, of the “Rheinische Post”. The reason given by Bischof was that the higher fuel prices would burden the company with more than 100 million euros. The burden of the oil price shock cannot be shouldered otherwise.
Problem pilot Boeing 737 Max 10 is threatened with extinction
The largest version of the Boeing 737 Max series to date, the 737 Max 10, still has no approval from the US authorities. The deadline for certification expires at the end of the year. Without an agreement with Congress, Boeing could be forced to to discontinue the 737 Max 10said CEO Dave Calhoun the industry journal “Aviation Week”.
Twitter stock: Musk deal in serious jeopardy
The share of the short message service Twitter was clearly under pressure. The trigger was a report by the Washington Post that the ongoing conflict between Elon Musk and Twitter management over the number of spam and fake user accounts on the platform was seriously endangering the $44 billion takeover.