market report
Status: 21.10.2022 9:57 a.m
The fear of further rising interest rates caused investors to act cautiously on Friday. The stock market is now hoping for a strong earnings season.
The DAX starts the trading day with a discount of around one percent to 12,650 points. The leading German index rose 0.2 percent yesterday to 12,767.41 points. “In order to maintain chances of renewed price gains and a bottoming out, it would be important that the DAX does not slip below the area of 12,375/12,400 points again,” believe Helaba’s market observers. It is the ongoing concerns about inflation and interest rates that are currently preventing investors from investing in the stock market.
In addition to the interest rate policy of the central banks, the current reporting season remains an issue: “So far, market participants have one less thing to worry about. The reporting season in the USA is going better than expected, in fact better than feared. But now the quarterly reports are due in Germany and Europe. And it will be show to what extent the Ukraine war has had an impact,” writes Christian Henke, an expert at IG Markets.
Reverse on Wall Street
The US standard value index Dow Jones closed yesterday 0.3 percent lower at 30,333 points. The tech-heavy Nasdaq fell 0.6 percent to 10,614 points. The broad S&P 500 lost 0.8 percent to 3665 points.
“The problem is that the macro environment remains difficult,” said Shane Oliver, chief economist at AMP Capital. He added that the market is in a tug-of-war between investors who see opportunities and those who are focused on the difficult environment.
Asian stocks under pressure
The stock markets in Asia also fell back: The Japanese Nikkei 225 closed 0.43 percent lower at 26,890.58 points. China’s CSI 300 index, which includes the 300 most important companies on the mainland stock exchanges, lost a similar amount, falling 0.62 percent to 3731.75 points.
The technology-heavy leading index Hang Seng of the Hong Kong Special Administrative Region recently fell by 0.71 percent to 16,164.44 points. Concerns over further US export restrictions aimed at limiting China’s access to key computing technologies weighed on shares. Australia was also down. The Australian leading index S&P ASX 200 fell by 0.8 percent to 6676.76 points.
Oil prices rise slightly
Oil prices continued to rise today, albeit only slightly. A barrel (159 liters) of North Sea Brent with delivery in December cost 92.76 US dollars in the morning. That was 38 cents more than the day before. The price of a barrel of US West Texas Intermediate (WTI) grade for delivery in November rose 0.38 cents to $84.89.
Concern about the slowdown in the global economy tends to continue to weigh on oil prices. For this reason, North Sea oil has lost about a third of its value since the beginning of June. Among other things, the high inflation and sharply rising interest rates, which increasingly developed into a brake on economic development, had a negative impact.
Texas is suing Google
Texas Attorney General Ken Paxton is expanding his legal campaign against tech companies with a new lawsuit against Google. He accuses the Internet giant of creating biometric profiles of people without their consent. According to the lawsuit, Google violated a Texas data protection law. It’s about both face and voice recognition.
In February, Paxton sued the Facebook group Meta for a similar reasoning over an earlier function in which users were automatically recognized in photos. In 2020, Facebook settled a lawsuit in the state of Illinois, which also has a law protecting biometric data, by paying $650 million. Google agreed to a $100 million settlement there. Google rejected the allegations.
Musk wants to cut thousands of jobs on Twitter?
According to a newspaper report, Elon Musk is planning a job cut on Twitter. The Washington Post wrote that he had indicated to potential investors that he would reduce the number of employees in the event of a takeover from 7,500 to around 2,000. The newspaper referred to insiders and confidential documents.
Twitter’s chief legal officer Sean Edgett then tried to calm the employees down. The company has no confirmed information on Musk’s plans after the acquisition closes, he wrote in an internal circular shared with the financial service Bloomberg Template. Because of this, Twitter recommends waiting for official information rather than paying attention to rumors or unconfirmed information, Edgett wrote.
Adidas: Profit expectations are shrinking
Slack in China, withdrawal from Russia and a discount battle with world market leader Nike: The sporting goods group Adidas has had to scale back its profit and sales expectations significantly for the second time in three months. The number two on the world market announced that the profit from continued business would only be 500 million euros this year. That would be a decrease of two thirds compared to the previous year (1.49 billion). Up until the middle of the year, Adidas had still hoped for an increase in profits to 1.8 billion, but after that it was still 1.3 billion.
L’Oreal increases sales more than expected
Business at the French cosmetics group L’Oreal continued to grow strongly in the third quarter. Sales rose by 19.7 percent to almost 9.6 billion euros compared to the same period last year, also as a result of the weak euro. Excluding currency effects and changes in business design, growth was 9.1 percent on a comparable basis.
Credit Suisse not guilty in foreign exchange scandal
In the scandal surrounding alleged manipulations on the foreign exchange market, the major Swiss bank Credit Suisse has won a victory before a US jury. In the trial in federal court in Manhattan, the jury found the bank not guilty. Credit Suisse faced allegations in the US that it conspired with other banks to manipulate prices in the foreign exchange markets between 2007 and 2013. A corresponding class action lawsuit was filed by investors in 2013. Credit Suisse was the last remaining bank in this case. 15 other financial institutions had already agreed on a settlement of 2.3 billion dollars.
Snapchat stock plummets
The business of the once explosively growing photo app Snapchat is hardly growing. With a sales increase of six percent to 1.13 billion dollars, the operating company Snap recorded its slowest growth so far in the last quarter. This drives investors to flee: the share price collapsed by 27 percent in after-hours trading on Thursday. Since the beginning of the year, the paper has lost more than three quarters of its value.