market report
The new record high in the DAX is slightly out of sight in the morning. The leading German index is expected to lose around 0.3 percent at the start of trading. In the afternoon, the US stock exchanges get back into the action.
According to pre-market indications, the German stock market barometer is expected to be at 17,045 points at the start of trading. That would correspond to a minus of 47 points. Yesterday the DAX left trading with small losses at 17,092 points. The record high has been 17,198 points since last Friday.
The US stock exchanges were closed yesterday due to a holiday and were unable to provide any stimulus to German trading. The US indices only start the shortened trading week this afternoon.
Small losses prevail in Asia in the morning. The Japanese Nikkei index fell by 0.4 percent to 38,325 points. The broader Topix index fell 0.3 percent to 2,632 points. The Shanghai stock exchange was quoted unchanged. The index of major companies in Shanghai and Shenzhen lost 0.2 percent.
The Chinese markets could not be stimulated even by an unexpectedly significant interest rate cut by the Chinese central bank. The monetary authorities reduced the key interest rate for five-year loans (LPR) by 25 basis points to 3.95 percent. Economists had expected a reduction of five to 15 basis points. “This is a significant rate cut that shows policymakers are serious,” said Christopher Wong, foreign exchange strategist at OCBC.
On the foreign exchange market, the euro cannot break free of its trading range of the past few days in the morning. The European common currency is trading at $1.0765. There is also little movement in raw material prices this morning. The price for a barrel of North Sea Brent oil is quoted at $82.92. As yesterday, a troy ounce of gold currently costs $2,018.
A number of company reports from the ranks of German companies must be evaluated. The dialysis specialist Fresenius Medical Care from the MDAX is benefiting from its austerity measures and a settlement in a legal dispute in the USA. The adjusted operating result increased by 13 percent to 1.74 billion euros last year. Adjusted for currency effects, there was an increase of 15 percent, meaning FMC exceeded its forecast of an increase of 12 to 14 percent. The group raised its targets in November following a settlement in a legal dispute with the US government over legally disputed claims, which had a positive effect on earnings.
Yesterday after the stock market closed, Bayer announced that it would reduce its dividend to the legally required minimum for three years in order to reduce debt. For the past year there was a distribution of 0.11 euros per share. Last year, shareholders received a dividend of EUR 2.40 per share. The proposal to the general meeting is related to the company’s current level of debt in combination with high interest rates and a tense situation with freely available funds.
Lufthansa shares are also likely to be in the spotlight among companies. Due to another warning strike by ground staff, 80 to 90 percent of the airline’s core brand flights in Germany are canceled.
In the middle of preparations for the major shipping company MSC to join HHLA, the Hamburg port logistics group HHLA is feeling the consequences of the weak economic situation. As HHLA announced in the evening, the operating result (EBIT) fell by 54 percent to 93 million euros in the past financial year. It therefore fell short of the expectation of a range of 100 to 120 million euros. Due to the economic downturn, handling and transport volumes have fallen. In addition, the EU sanctions against Russia because of the war in Ukraine put a strain on container throughput. According to preliminary figures, sales of the listed port logistics subgroup fell by 8.6 percent to 1.4 billion euros.
The Federal Court of Justice (BGH) is today dealing with the protection of the technology giant Google’s trade and business secrets in an antitrust case. The core issue here is the question of whether and to what extent the Federal Cartel Office is allowed to pass on confidential information to competitors. It’s about Google Automotive Services, a product bundle consisting of the Google Maps mapping service, a version of the Google Play app store and the Google Assistant voice assistant. According to the information, Google generally only offers the services together.