market report
Status: 07/22/2022 09:34 a.m
After a rapid rally, which at times pushed the DAX up by more than 1000 points, some investors hit the sell button at the end of the week. Is this just profit taking or is there more to it?
After a rapid rally that drove the DAX from its low of 12,434 points over 1000 points to 13,399 points, the bulls are gradually running out of breath. After this small minus of 0.3 percent yesterday it also goes down further on the last trading day of the week.
The DAX started XETRA trading down 0.5 percent to 13,180 points. What is obviously missing are the follow-up buyers who could drive the leading German index further up.
DAX consolidated – important brands at a glance
“The hesitation of investors can be interpreted in two ways: either there is no real interest in buying. Then there is a risk of a new crash if the index slips back below 13,000 points,” explains Jochen Stanzl, chief analyst at CMC Markets. “Or everyone waits for a retest of the technical breakout mark at 13,020 points and only gets in when it has held.”
The technical analysts at HSBC meanwhile see the current consolidation in the DAX as “rather unproblematic”. Only a slide below the holding zone above 12,900 points – this is where the most recent broken downtrend since the beginning of June runs, among other things – would worry them. “Below that, the view would then turn south again and the hope of an end to the bear market would be lost.”
Investors digest ECB interest rate turnaround
From a fundamental perspective, DAX investors are still digesting the turnaround in interest rates that began yesterday. With its first interest rate hike in eleven years, the ECB came up with a unexpectedly strong move of 50 basis points braced against the ever escalating inflation.
Such a significant interest rate hike is a negative signal for the stock markets in two respects. First, it makes stocks less attractive compared to bonds. Second, it shows how serious the situation is when even ECB President Christine Lagarde, who has been so hesitant and hesitant to date, suddenly dares to take a big interest rate hike.
Is the ECB too late?
Other central banks such as the US Federal Reserve (Fed) had already taken up the fight against inflation much earlier and with more commitment by raising interest rates sharply. From a global perspective, the ECB is a clear laggard with its interest rate turnaround, which has only just been initiated.
Quite a few experts therefore fear that the ECB will now be forced to raise interest rates more quickly and significantly at the coming meetings than would have been necessary if it had intervened earlier.
Gas flow through Nord Stream 1 remains constant
After all, when the Baltic Sea pipeline went into operation on Thursday, fears that Moscow could leave the tap permanently turned off were initially unfounded.
According to network data, flows have been flowing since the maintenance work was completed further continuously gas through the pipeline Nord Stream 1. Nevertheless, the government, business and experts are preparing for a continuation or even a possible worsening of the gas crisis.
Late rally on Wall Street
Good guidelines for DAX trading come from Wall Street. There, the major US indices accelerated again late yesterday and closed at or near their daily highs.
The US leading index Dow Jones went 0.5 percent firmer at 32,036 points from trading. The broad S&P 500 climbed 0.9 percent to 3,998 points. The tech-heavy Nasdaq advanced 1.4 percent to 12,059 jobs.
Tesla attracts tech bargain hunters
One Doubling profits at US electric car maker Tesla has attracted bargain hunters, especially in tech stocks. The company’s earnings may have been a little better than feared, said J. Bryant Evans, investment advisor and portfolio manager at Cozad Asset Management. “We investors think that the technology sector in particular has fallen too much and that there may be some good opportunities there.”
Shanghai lower due to Corona – Nikkei up
Renewed corona outbreaks hit the Chinese stock market early this morning. The Shanghai stock exchange fell by 0.7 percent to 3249 points at the end of the week. The Japanese Nikkei index, which comprises 225 values, continued on its recovery course and gained 0.4 percent to 27,908 points.
Gas crisis and Italy continue to weigh on the euro
Yesterday, the euro was only able to benefit briefly from the first interest rate hike in the euro zone in eleven years. The European common currency was down 0.2 percent at $1.0198 in early forex trading.
Sentiment in the euro zone is dampened on the one hand by the question of whether the resumed natural gas supplies from Russia will be permanent. On the other hand, the uncertain political future of Italy, where early elections are to be held at the end of September, is a burden.
Supply concerns drive oil prices again
Investors are stocking up on crude oil again for fear of supply bottlenecks. The price of Brent from the North Sea increased by 1.2 percent to $105.09 a barrel. The price of a barrel of the US West Texas Intermediate (WTI) variety rose by 0.9 percent to $97.25.
Major order for Siemens Energy
The energy technology group Siemens Energy has received a major order for the connection of several wind farms. In total, the lines should bring up to 1.8 gigawatts of power from the German North Sea ashore, as the company announced yesterday. This corresponds to the needs of 1.8 million people and is the largest order for offshore grid connection that Siemens Energy has ever received.
Infineon presents new chip for digital locks
A new chip from Infineon should enable digital locks without their own power supply. Instead of batteries or a power connection, the user’s mobile phone – which is also the key – supplies the energy to unlock the door. Both data and energy are exchanged via NFC – a process that is used, for example, for payment transactions via smartphone.
Frankfurt Airport expects a rush to start the holiday season
Frankfurt Airport is expecting more passengers at the weekend than it has since the outbreak of the corona pandemic in March 2020. According to the operating company Fraport, Germany’s largest airport expects up to 200,000 passengers on the last day of school before the summer holidays in three German federal states, as well as on Saturday and Sunday. There were not that many this year with a previous high of a good 180,000.
Ceconomy narrows annual targets
The clouded consumer climate is weighing on the electronics retailer Ceconomy. The SDAX Group felt this in the third quarter of the financial year and is therefore lowering its forecasts for sales and profits. Weaker demand, the development of inflation and sharply rising energy costs impacted the regions of Germany, Austria and Switzerland in particular.
Snap shocks investors
The business development of the photo app Snapchat alarmed investors. In a first reaction to the latest quarterly figures, they dropped the shares of the operating company Snap by around a quarter. Snap posted its slowest growth since the company went public five years ago, with sales up 13 percent to $1.11 billion. The quarterly loss widened from just under $152 million a year earlier to a good $422 million.
Vaccine manufacturer Lonza with profit plus
The pharmaceutical contract manufacturer Lonza has almost doubled its half-year profit. The surplus climbed to 498 million francs in the first six months after 263 million francs in the same period last year, as the Swiss company announced. The group, which produces, among other things, the active ingredient for the corona vaccine of the US biotechnology company Moderna, confirmed the outlook for the year as a whole.