market report
Moderate positive signs on the German stock market: The DAX is slightly up at the start of trading, despite ongoing uncertainty about the situation in Russia. Economic signals are also not very encouraging.
The German stock market index started trading on XETRA with 15,875 points. This corresponds to an increase of 0.4 percent. After yesterday’s small minus, the stock market is initially stabilizing. However, clear upward impulses are not in sight.
US stock markets closed unevenly last night. The Dow Jones index of standard values closed with little change at 33,714 points. The technology-heavy Nasdaq, on the other hand, fell 1.2 percent to 13,335 points. In Japan, the Nikkei index closed 0.5 percent weaker at 32,538 points. On the other hand, Chinese Premier Li Qiang’s announcement that he intends to use further political measures to stimulate domestic demand gave investors in China a sigh of relief. The Shanghai stock exchange was up 0.9 percent.
After the mercenary rebellion in Russia, investors remain uncertain about future developments. In addition, important economic data are due today, especially in the USA, such as incoming orders in industry or data on the real estate market. Important monetary policy signals from central banks could also follow in the coming days. European Central Bank (ECB) President Christine Lagarde is scheduled to speak today at the European Central Bank’s annual monetary policy forum in Sintra, Portugal. It is expected that Lagarde will comment on the further course in the fight against high inflation.
The ifo barometer for expectations in the German export industry fell to minus 5.6 points in June, after plus 1.0 point in May. This is the lowest value since November 2022, as the Munich ifo Institute announced in its monthly company survey. “In addition to the domestic demand weakness, fewer orders from abroad are now becoming apparent,” says Klaus Wohlrabe, head of the ifo surveys. The order cushion is getting thinner and thinner. The majority of sectors are now assuming that their exports will decline in the next three months.
The European common currency is currently trading at $1.0935. This means that it can continue to hold its own despite the political turbulence in Russia. The Turkish lira is still under pressure in the morning. At times, 26.11 lira were paid for one dollar during the night, more than ever before. The most recent significant interest rate hike by the Turkish central bank was unable to stabilize the lira rate. According to many economists, the increase was too low given the high inflation.
On the oil markets, fears of supply because of the unrest in Russia, the world’s third largest oil producer, are giving prices a little boost. The North Sea crude oil variety Brent and the light US variety WTI rose in the morning by around half a percent to 74.73 and 69.84 dollars per barrel respectively.
In the DAX, the shares of Daimler Truck, BASF and Deutsche Post can take the lead in the morning with clear gains. Siemens Energy and the papers of the medical technology specialist Sartorius are the biggest price losers.
The US company General Dynamics and the US subsidiary of the German Rheinmetall group are one step further in the race to develop a successor to the US Bradley infantry fighting vehicle. The two companies were selected from five applicants to develop concrete proposals and later prototypes for the weapon system, the US Army said at night. The winner of the tender could win orders with a volume of more than 45 billion US dollars.
According to the works council, VW is temporarily reducing the production of electric cars at its Emden plant due to weakening sales. In the next two weeks until the factory holidays, the late shift in the production of the compact SUV ID.4 and the first models of the new electric sedan ID.7 will be canceled, said Manfred Wulff, head of the works council, to the dpa news agency. A VW spokeswoman told the “Nordwest-Zeitung” that they were “confident that the utilization of the plant will increase again with the market launch of the ID.7 at the end of the year”.
An increase in the reimbursement of dialysis treatment costs as part of the state Medicare program has turned out to be lower than experts had expected. Shares in FMC from the MDAX, which operates dialysis clinics in the USA, lost around four percent in early trading. According to the US bank JPMorgan, the reimbursement of dialysis treatment costs will increase by 1.7 percent. That is significantly less than the market expectation, which was over three percent.
The ailing clothing manufacturer Gerry Weber plans to close most of its stores in Germany in the coming months. The company announced that a total of 122 of the 171 of its own stores and outlets are to be closed by the end of September this year as part of the restructuring efforts. This will also eliminate around 350 full-time jobs. The fashion manufacturer wants to focus more on the wholesale business, said company boss Angelika Schindler-Obenhaus. In April, Gerry Weber International AG applied to the Essen district court for the initiation of restructuring proceedings in accordance with the law on the stabilization and restructuring framework for companies (StaRUG).
The online giant is defending itself at the Federal Court of Justice (BGH) against a decision by the Federal Cartel Office. The cartel senate in Karlsruhe is hearing for the first time today about a complaint against the classification as a company with “outstanding cross-market importance for competition”. This decision gives the agency more power to prohibit certain types of behavior. In 2021, the Cartel Office was given more powers over companies with cross-market influence and can prohibit them from practices that it believes endanger competition.