market report
Status: 10/17/2022 7:42 a.m
Investors are worried about further tightening global financial conditions and UK financial turmoil. Now it will be seen how sustainable the recent price gains are.
At the beginning of the week, investors were once again concerned about longer-term higher interest rates, which could accelerate a global recession. Against this background, the DAX should initially not be able to add much to its recent price gains. The broker IG assesses the German standard values at the hour at about the level of their XETRA closing price on Friday evening.
DAX bulls with stage victory
The central question remains for the DAX: How much negative is already priced into the prices? Linked to this is the question of the sustainability of the recent price gains. At the end of the week, the leading German index had increased by 0.7 percent to 12,438 points.
The German standard values were thus able to recapture their lows from March and July at 12,439/12,391 points. From a technical point of view, this could be the starting signal for a clear countermovement and thus further price gains towards the 12,800 point mark.
US reporting season as a factor of hope?
The hopes of many investors are now resting on the improving reporting season in the USA. Analysts had recently cut their expectations for profit and sales development significantly. Analysts now expect third-quarter earnings for S&P 500 companies to have risen just 3.6 percent year-on-year, according to data from Refinitiv. This in turn leaves room for positive surprises.
Wall Street falls
However, the start of the US reporting season was a complete failure. Declining profits at the big US money houses had clouded the mood on Wall Street at the end of the week. The Dow Jones index of standard values closed 1.3 percent lower on Friday at 29,634 points. The tech-heavy Nasdaq fell 3.1 percent to 10,321 points. The broad S&P 500 lost 2.4 percent to 3583 points.
Big US banks earn less
JPMorgan, Morgan Stanley, Citigroup and Wells Fargo all declined over the quarter as the stock market turmoil crippled investment banking and increased funds needed to cover loan defaults.
Asia stock markets in the red
The negative guidelines from Wall Street are also pulling the Asian stock exchanges into the red. The Nikkei index, which comprises 225 values, was 1.4 percent lower at 26,703 points. The broader Topix index fell 1.1 percent to 1878 points. The Shanghai stock exchange was down 0.1 percent. The index of the most important companies in Shanghai and Shenzhen lost 0.4 percent.
British bonds in the sights of investors
In the bond market, all eyes are on UK bonds this morning after the Bank of England’s (BoE) emergency purchases ended. Prime Minister Liz Truss’ decision to sack her Treasury Secretary may help reassure investors, but her own fate remains unclear. According to a newspaper report, lawmakers want to depose Truss this week.
Pound and euro little moved
The British pound is trending sideways in Asian trading. “The only thing that can help the pound is a higher probability that Truss will resign and her paleo-conservative experiment will finally be buried,” Commerzbank foreign exchange expert Ulrich Leuchtmann is convinced.
In Asian foreign exchange trading, the euro initially showed little movement. The European common currency is currently trading at $ 0.9737.
Pilots’ strike at Lufthansa subsidiary Eurowings
The pilots’ strike at the Lufthansa subsidiary Eurowings could affect around 20,000 passengers today and paralyze almost half of the flight operations of the low-cost airline. The pilots’ union Vereinigung Cockpit (VC) has called for industrial action from Monday 00:00 to Wednesday 23:59.
Dräger cancels forecast
After a weak quarter, the medical and safety technology group Drägerwerk, which is listed in the SDAX, can no longer meet its forecast for the current year. As justification, the board referred to ongoing problems in the supply chain and high costs for the procurement of materials.
Credit Suisse: Swiss business under scrutiny
Credit Suisse should not only examine the sale of parts of the investment bank, but also parts of the Swiss business. As stated in an article in the “Financial Times” on Saturday, the bank could sell off Bank-now or investments such as those in the SIX Group, Swisscard or the fund company Allfunds.