market report
Status: 05/30/2022 4:17 p.m
Given the latest inflation data, the stock market cannot sustain the initially higher gains. But the DAX remains in positive territory. US stock markets will remain closed today.
The German stock market cannot keep up its lively start to the week on Monday afternoon. On the domestic inflation rate of 7.9 percent in May, investors initially reacted with sales. However, there can be no question of a sell-off, as the DAX remains up a good half a percent and continues to move in a manageable trading range between 14,519 and 14,589 points.
“There is still pressure in the inflation kettle. There will be further price rounds in retail. It must therefore be assumed that inflation rates will climb to even higher levels. The ECB recognized the signs of the times too late,” comments Thomas Gitzel from the VP Bank.
For many experts, a rate hike by the ECB in July is already a foregone conclusion. However, there are doubts as to whether the ECB, which has been very cautious for a long time, can effectively combat the specter of inflation. In any case, the pressure on the European currency watchdogs increases with the data. Data for the whole eurozone is expected tomorrow.
Was that the tip?
In the future, there will probably be more discussion on the markets as to whether the peak of the inflation wave has now been reached. “Inflation is now close to its peak. From the middle of the year, the inflation rate will fall for statistical reasons alone, because then the strong price increases of the first half of 2021 will not be included in the year-on-year comparison,” explained ZEW expert Friedrich Heinemann.
However, this foreseeable decline in inflation should not be misunderstood as a long-term relaxation. The ECB’s inflation target of two percent is still a long way off for Germany and the euro zone, Heinemann continued.
China hopes remain
In the course of trading so far, the DAX had mainly been supported by the hope of a normalization in China and had increased. The experts at Credit Suisse speak of a “rally of relief”. Because in the economic metropolis of Shanghai, starting this Wednesday, Lockdown measures are largely eliminated.
The biggest winners in the leading index include stocks that have fallen so heavily recently, such as Delivery Hero or Zalando. Investors access there at a lower level. Stock exchange operator Deutsche Börse, on the other hand, tends to be weaker, and Linde is also giving way and is struggling with the 300 euro mark. The latter, however, is whining at a high level, because at prices around 300 euros the manufacturer of industrial gases is close to its all-time high.
DAX with technical buy signal
Recently, the technical picture in the DAX had brightened significantly. In the previous week, the stock market barometer had managed to overcome the downward trend that had lasted since January and then jumped over the resistance zone at 14,200 points. The leading German index thus sent a technical buy signal that continues to support the DAX shares today.
Import prices are rising at their highest rate since 1974
Meanwhile, a negative indication for the markets comes from the import prices already published in the morning. According to this, German imports in April increased by 31.7 percent compared to the same month last year as a result of higher energy prices. “The last time there was a higher year-on-year change was in September 1974 as part of the first oil crisis,” emphasized the Federal Statistical Office.
US stock markets remain closed
There are no further impulses from the USA today, because the US markets are closed due to the Memorial Day holiday. Wall Street was up sharply on Friday. The leading index Dow Jones was 1.76 percent higher at 33,212 points. The Nasdaq technology exchange had risen by more than three percent.
Euro remains in demand thanks to interest rate speculation
The German inflation figures do not throw the euro off course. The common currency surges as high as $1.0780, marking its highest level in five weeks. The dollar index, meanwhile, fell 0.3 percent to a five-week low. Market-moving US economic data are no longer expected today.
Weaker dollar drives gold price higher
Gold is one of the beneficiaries of the weaker dollar. $1,860 was paid for a troy ounce of gold in the afternoon, an increase of almost 0.6 percent compared to the previous day. A weaker dollar makes gold cheaper in the non-dollar area and thus strengthens demand for the yellow precious metal.
Bitcoin at two-week high
The increasing willingness to take risks of many investors is benefiting not only the stock exchanges but also the market for cryptocurrencies. Bitcoin rose 7.4 percent to $30,859, its highest level in two weeks. The increase is currently a good 3.5 percent. Ethereum is trading a good four percent higher at $1890 and was a good ten percent higher at the daily high. “Risk assets are increasingly in demand again, while safe havens are on the sell list,” says Thomas Altmann of QC Partners.
Oil prices hit two-month high
Fears of a supply bottleneck pushed oil prices to their highest level in two months at the beginning of the week. The North Sea variety Brent has increased in price by 0.9 percent to $120.10 per barrel. Investors are concerned about the start of the travel season in the USA, which traditionally begins after Memorial Day and in the USA “driving season”, i.e. summer driving season , is called.
In addition, the latest news from China indicates a renewed increase in oil demand from the second largest economy. In the economic metropolis of Shanghai, for example, all companies were allowed to resume production from June.
Siemens receives the largest order in the company’s history
Siemens has another Billion dollar order from Egypt received for ICE trains, among other things. Together with two partners, the DAX group signed a contract for the construction of the sixth largest high-speed system in the world. Siemens alone has an order value of 8.1 billion euros.
Volkswagen holds onto factory in Uyghur region of Xinjiang
Despite reports of human rights violations against the Uyghurs, Volkswagen does not want to withdraw from the Chinese province of Xinjiang. Economically, the location in Xinjiang plays a rather insignificant role for Volkswagen VW boss Herbert Diess the “Handelsblatt”. VW could close the plant. “But we don’t do it because we believe that our presence has a positive effect,” said Diess.
Dream start for Paramount film “Top Gun: Maverick”
The new Tom Cruise movie Top Gun: Maverick has this weekend in North America Grossed $134 million and gave the actor a personal opening record. The Paramount flick is also set to set a new all-time high of $151 million in ticket sales for a long Memorial Day weekend.
Ryanair demands lower airport fees at BER
After Easyjet’s partial withdrawal announcement, the airline Ryanair is demanding lower fees at the capital’s BER airport. “The government and Berlin Airport should act now,” said the Irish company. They should offer competitive airport charges so that the aviation sector at the location does not shrink to the level of much smaller cities.
Easyjet is canceling more than 200 flights
The British low-cost airline Easyjet has canceled more than 200 flights for the next two weeks. The company said this was necessary in order to be able to maintain a reliable service. Around 24 flights per day from London’s Gatwick Airport are said to be affected by June 6th. In addition to the upcoming celebrations for the throne jubilee of Queen Elizabeth II, there are also school holidays in England.
Environmentalists criticize Tesla plans
Environmentalists criticize plans to initiate a development plan procedure to expand the Tesla site in Grünheide near Berlin. The Association for Nature and Landscape Brandenburg announced that part of the area is a water protection area that prohibits the conversion of forest to another type of use. Tesla wants to build a freight station, logistics areas and parking spaces there.
SEC investigates Musk’s entry into Twitter
The US Securities and Exchange Commission has scrutinized the entry of tech billionaire Elon Musk as a major investor on Twitter. The authority asked the Tesla boss on April 4 for information about compliance with regulations when disclosing his Twitter involvement. This emerges from a letter to Musk that the regulator published on Friday. Shareholder lawsuits accuse Musk of market manipulation and securities fraud over late SEC filings.
Norwegian orders 50 Boeing jets
The airline Norwegian Air has ordered 50 aircraft of the type 737 MAX from the US aircraft manufacturer Boeing. The airline also secured options for a further 30 aircraft. For Norwegian, the order is a reversal. Because the group will own its fleet again. As part of insolvency proceedings, the company had previously been forced to only lease machines.
Stellantis and Toyota are collaborating on delivery trucks
Stellantis and Toyota are expanding their cooperation and want to jointly bring a larger van onto the market. Stellantis will build the vehicle for Toyota’s European subsidiary at the plants in Gliwice in Poland and Atessa in Italy, the car companies said. The vehicle should come onto the market in mid-2024. An electric version is also planned.