market report
Status: 05/26/2022 6:46 p.m
Thanks to the Fed, the mood on the stock exchanges has brightened further. The prospect of prudent interest rate hikes drove the US stock exchanges and the DAX on Ascension Day.
The minutes of the Fed’s most recent meeting caused a sigh of relief on stock exchanges worldwide today. The US Federal Reserve signaled further rate hikes of half a percentage point each in the coming months. “Investors seem relieved that the Fed hasn’t hinted at more aggressive rate hikes even as inflation remains elevated,” said Stuart Cole, chief economist at brokerage firm Equiti Capital.
US economy is shrinking
Good figures and upbeat statements from some US retailers also made investors optimistic. In addition, investment strategists such as Great Hill’s Thomas Hayes see the contraction in the US economy in the first quarter as a sign that the US Federal Reserve could slow down its rate hikes in a few months. “The numbers suggest that growth is slowing, demand is slowing and maybe even inflation is slowing.”
According to a second estimate, the US economy shrank somewhat more significantly in the first quarter than previously assumed. Gross domestic product (GDP) fell an annualized 1.5 percent. In a first estimate, a decline of 1.4 percent was determined. In the fourth quarter, the economy had grown by 6.9 percent.
Will the Fed soon break the cycle of rate hikes?
Some observers even find hints in the minutes that at some point the Fed may pause its cycle of rate hikes to gauge its impact. The most likely scenario is that monetary policy will subsequently be tightened more cautiously, predicted Paul Donovan, chief economist at UBS Bank Asset Management. In recent months, experts have repeatedly warned that sustained rate hikes by the Fed could plunge the world’s largest economy into recession.
Wall Street keeps rising
US stock markets continued yesterday’s recovery. The Dow Jones rose 1.3 percent to over 32,500 points. The leading index could now leave the downward trend that began in April behind. The gains in the broader S&P 500 and the tech-heavy Nasdaq were similarly large.
New boost for the DAX
In the wake of the strong Wall Street, the Dax recorded the largest daily gains in two weeks. The leading German index climbed 1.6 percent to a good 14,231 points. However, due to the holiday, sales were relatively thin today. Chart technicians doubt whether the leading German index has the strength to break out of the downward trend that has been ongoing since January.
euros over 1.07 dollars
US dollar failed to benefit from Fed minutes. The dollar index, which tracks rates against major currencies, remained just above Tuesday’s four-week low at 102.04 points. In return, the euro will become more expensive. The common currency rises above $1.07.
The Central Bank of Russia cuts interest rates
The Russian central bank has lowered the key interest rate by three percentage points to eleven percent. The Russian authorities are currently trying to stabilize the exchange rate of the ruble after the currency had appreciated massively in recent weeks despite the Ukraine conflict. The interest rate meeting of the central bank was actually only planned for June 10th. After the meeting, the central bank said the underlying conditions for Russia’s economy remain “challenging” and “significantly hamper economic activity”.
Turkey’s central bank won’t lower interest rates
The Turkish central bank, on the other hand, has not touched the key interest rate despite extremely high inflation and is leaving it at 14 percent. The monetary authorities have kept interest rates stable since January. The key interest rate is well below the very high inflation rate. Consumer prices were up almost 70 percent year-on-year in April.
Oil slightly more expensive, copper cheaper
Brent crude oil from the North Sea rose in price by around 2.6 percent to $116.81 per barrel (159 liters). The end of the road has not yet been reached, said analyst Tamas Varga from brokerage house PVM. The summer driving season in the US and an EU embargo on Russian oil supplies are just around the corner. Copper, on the other hand, fell by up to one percent to $9,277 per ton. The lockdowns in China continue to fuel fears of a recession and falling copper demand. China is the world’s largest buyer of this industrial metal.
Zalando and Hellofresh on the rise
The recently badly battered shares of the Corona crisis winners Zalando, Hellofresh and Delivery Hero were particularly in demand in the DAX today. They rose by more than five percent in some cases. This is currently not more than another attempt to bottom out at a low price level, traders said. Bayer’s shares increased by 2.5 percent. An analyst at Citigroup was very optimistic about the sales prospects for drug candidate Asundexian.
Goldman Sachs boosts Freenet course
A buy rating from Goldman Sachs boosted Freenet’s shares by more than four percent. The investment bank has upgraded the papers of the mobile phone provider from “sell” to “buy”. Freenet offers investors a rare combination of growth and high payouts, Goldman Sachs said.
Several stocks with a dividend discount
Some papers were traded with a dividend discount on Thursday and therefore only look weak. In the MDax, this affected the chemical groups Evonik and Lanxess as well as the car rental company Sixt, in the SDax the leasing specialist Grenke and the IT company Secunet.
Weak outlook from Nvidia
Nvidia has spooked its investors with a bleak outlook. The papers lost 4.5 percent. The figures from the developer of graphics processors and chipsets for personal computers, servers and game consoles were strong in the first quarter, but the outlook for the gaming division was weak, said a JPMorgan analyst.
Is iPhone production stagnating at Apple?
Apple shares lost over two percent at the start of trading. According to insiders, the iPhone manufacturer has doubts about the increase in sales of its smartphone in the current year. The group has set its suppliers to produce around 220 million of the smartphones for 2022, which is roughly the same as the previous year’s level, the Bloomberg news agency reported, citing people familiar with the matter. So far, around 240 million units are expected on the market.