market report
Before the eagerly awaited US job market report, investors shy away from the risk at the start of trading. Even encouraging signals from China are taking a back seat.
The DAX started the trading day down 0.2 percent to 15,913 points. Yesterday, the leading German index rose by 0.4 percent to 15,947 points. For the stock market month of August, however, the most important German stock market barometer recorded a minus of around three percent.
Konstantin Oldenburger, market analyst at CMC Markets, expects prices to continue to rise: “The price losses of the past four weeks have already made the mood on the stock exchange so pessimistic that good breeding ground has emerged for the bull market to continue in 2023.”
Above all, the future monetary policy of the US Federal Reserve and the ECB will determine the future direction of the stock exchanges. The experts at Helaba summarize the situation as follows: “Participants in the financial markets remain unsure about the further interest rate path of the central banks. Both the Fed and the ECB will decide on the interest rate level this month and in both cases there are good arguments for standing still, however probably as many for a further increase.” The question is how the central bankers weight the recently received economic and price data.
ECB Vice President Luis de Guindos has now stated that the ECB is nearing the end of its rate hike cycle. However, the decision by the ECB on further tightening of its monetary policy at the next meeting in two weeks has not yet been made.
In any case, the ECB interest rate minutes published yesterday left the door open for a rate hike in September. According to Austria’s head of the central bank, Robert Holzmann, the ECB may have to raise interest rates even further in the fight against inflation.
Tony Roth, chief investor at the financial services provider Wilmington Trust, comments on the situation in the USA: “You can see that inflation is really slowing down, and that has been the dominant narrative for some time,” said the expert. “There’s a lot of data yet, but it’s already very likely that the Fed will take no action in November and that the issue of rate hikes is really off the table.”
Whether that will be the case depends not least on the data for the US labor market for August, which will be released today. Thomas Altmann, portfolio manager at asset manager QC Partners, sees the report as “something like the last hurdle on the way to an interest rate pause” by the US Federal Reserve. The stock exchanges are expecting a cooling off in the labor market. “And that slowdown is exactly what the Fed wants to see as a result of its tightening policy.”
In addition to the labor market report, the ISM index for the manufacturing sector, which is also highly regarded, is due in the USA today and will provide further indications of the economic situation.
In the US, the Dow Jones closed yesterday 0.5 percent lower at 34,721 points. The tech-heavy Nasdaq, on the other hand, advanced 0.1 percent to 14,034 points. The broad S&P 500 lost 0.2 percent to 4,507 points.
China’s commitment to its real estate sector and efforts to slow the pace of the yuan’s decline boosted Asian stock markets at the end of the week. And according to a survey of the private sector published today, manufacturing activity in China surprisingly rose again in August, after analysts had expected a slight decline on average.
The Shanghai Composite gained 0.3 percent, the index of major companies in Shanghai and Shenzhen advanced 0.6 percent. In Japan, investors also stocked up on stocks at the end of the week. The Nikkei index increased 0.3 percent to 32,710 points. The broader Topix rose temporarily by 0.9 percent to 2,353 points, its highest level since July 1990.
The Hamburg-based copper manufacturer Aurubis has issued a profit warning due to abnormalities in its metal inventories. “During the regular inspection of the metal stock, Aurubis found significant deviations from the target stock as well as deviations from special samples of certain deliveries of input materials in the recycling area,” the MDAX group announced. On the basis of these indications, it is assumed that he has become the subject of criminal activities. The extent of the damage is still unclear, an extraordinary inventory is running. The State Criminal Police Office was involved. The result of the inventory is expected at the end of September. Damage in the low, three-digit million euro range cannot be ruled out.
After new problems at its stake in Aurubis became known, the Salzgitter steel group also withdrew its earnings forecast for the current year. So far, the management around CEO Gunnar Groebler had promised a significant decline in pre-tax earnings to 300 to 400 million euros for 2023 due to falling steel prices and lower demand. Salzgitter has a stake of almost 30 percent in the Hamburg copper manufacturer Aurubis.
The Fielmann optician chain has raised its forecast after the latest acquisitions. External sales should be around 2.3 billion euros in 2023 and thus 13 percent above the previous year. So far, an increase of seven to ten percent had been promised. Group sales should increase to the same extent to around two billion euros. In terms of the operating result (EBITDA), Fielman expects an increase of 18 percent to around 400 million euros. An increase of nine to 21 percent had previously been forecast. Earnings before taxes (EBT) will climb to over EUR 190 million, which also corresponds to growth of 18 percent.
US electric car maker Tesla has launched what it says is a “refreshed” variant of its Model 3 in China with a starting price of 259,900 yuan (about $35,800). According to the company’s website, the starting price of the new Model 3 is 12 percent higher than that of the old model. The company announced that the new electric car will also have a longer range than its predecessor.
The American union for employees in the auto industry, United Auto Workers (UAW), has filed complaints with the US Labor and Labor Administration (NRAB) alleging unfair labor practices against General Motors and Chrysler’s parent company Stellantis. According to UAW Chairman Shawn Fain, Detroit automakers want the ability to shut down US auto plants and relocate to low-wage countries. He called this “economic terrorism”. Both GM and Stellantis denied the allegations.