market report
Status: 06/14/2022 12:32 p.m
It was foreseeable that today’s DAX recovery would not last. The risks for the stock markets associated with a further tightening of US monetary policy are too great.
The DAX rose to 13,570 points in early trading. But as expected, the recovery didn’t go far today – it’s already over. The leading German index is currently 0.7 percent down and is again below the 13,400 mark at 13,333 points.
breathing space on the stock market
“Investors don’t like the cocktail of inflation, interest rates and the resulting fear of recession at all,” commented market observer Christian Henke from Broker IG. The critical situation is unlikely to change any time soon: “The environment for German shares is and will remain bad,” write the market observers at Index Radar. “The war on the doorstep, inflation, rising interest rates and falling profit expectations are meeting previously quite high valuation levels.”
Update economy from 06/14/2022
Dorothee Holz, HR, 14.6.2022 12:15 p.m
The experts draw another arc to illustrate the current situation: since 2009, with a Covid interruption, the DAX has risen continuously from under 4000 to over 16,000 points. “Anyone who assumed that this development would continue indefinitely without any major breathing space should take a look at historical price developments over the past decades, especially in times of rising interest rates.”
How far will the Fed go?
According to experts, the US Federal Reserve should definitely continue the tightening course mentioned. The Fed interest rate decision is already on the agenda in the USA on Wednesday. A further increase in the key interest rate by 0.5 points is considered a consensus among analysts.
In the past few days, however, more and more experts have increased their expectations in view of the high inflation. The analysts at Bank ING no longer want to completely rule out tightening by a full percentage point. On the financial markets, expectations are clearly pointing towards an increase of 0.75 points. If the interest rate step turns out to be stronger than expected, the stock market is likely to react sensitively.
“Looking ahead, stubborn inflation is leading to an even more aggressive Fed stance, posing a serious risk of over-tightening and ultimately greater downside risk to the already faltering growth outlook,” said Allison Boxer, US economist at Pimco.
“A Touch of Recovery”
Against the background of the serious problems on the stock markets, the positive ZEW index is hardly noticed. After all, the economic expectations of German financial experts have brightened up from a comparatively low level. In June, the ZEW sentiment barometer rose by 6.3 points compared to the previous month to minus 28 points.
“That’s a hint of improvement in the red. In the global environment there is currently little room for optimism,” says Alexander Krüger, chief economist at Hauck Aufhäuser Lampe. Above all, the faltering delivery logistics and the high inflationary pressure weigh on the mood. Confidence will not return until geopolitics gets back on track.”
The euro temporarily falls below 1.04 US dollars
The euro recently fell briefly below the 1.04 US dollar mark. During the night, the common currency cost a low of $ 1.0397, which is less than a month ago. The euro is currently on the up again.
The strong dollar is putting considerable pressure on the euro. The greenback is currently benefiting from expectations of a decisive turnaround in interest rates in the United States.
Oil prices hardly move
Oil prices initially barely moved on Tuesday. In midday trading, a barrel (159 liters) of North Sea Brent costs around 122 US dollars.
The price for a barrel of the US West Texas Intermediate (WTI) variety is currently falling slightly to just under $121. Oil prices are thus staying at a high level. Since the beginning of the year, they have increased by around 55 percent.
Bitcoin keeps falling
The descent of Bitcoin and many other crypto assets continues. Today, the largest digital currency by market value fell towards the $20,000 mark. The low on the Bitfinex trading platform was around $20,860, the lowest level in a year and a half. The record high was reached in November at around $69,000.
Concerns about inflation and interest rates are the main reasons for the fall in prices. Risky investments such as digital currencies are being burdened by the resolute turnaround in interest rates because they do not generate any current income from interest.
Air France-KLM raises funds
The airline Air France-KLM has collected billions from investors to repay state aid from the Corona crisis. Overall, the group brought in almost 2.26 billion euros with the issue of new shares. The majority of the sum is to flow into the replacement of subordinated bonds in the amount of around 1.7 billion euros, with which the French state had helped the company a good year ago. The remaining proceeds are earmarked for debt reduction.
Morphosys wants to do research with Pfizer
Biotech company Morphosys and its partner Incyte are getting Pfizer on board for a new research alliance. Tests will combine Morphosys’ cancer drug Monjuvi with Pfizer’s drug lenalidomide and a certain fusion protein to give blood cancer patients suffering from diffuse large B-cell lymphoma (DLBCL). Morphosys is thus expanding its research pipeline with Monjuvi, which has already been approved in the USA and is marketed in Europe under the name Minjuvi.
Atos tests split and brings new bosses
The French IT company Atos is reacting to the ongoing headwind with a new company structure. A split into two listed companies is being considered. Atos also announced that CEO Rodolphe Belmer would be leaving the company at the end of September. CFO Uwe Stelter surprisingly announced his retirement in March. Atos recently surprised with two profit warnings within a short period of time. Siemens is a major Atos shareholder.
Evotec agrees cooperation with J&J subsidiary
The biotech company Evotec wants to research new active ingredients together with a subsidiary of the US pharmaceutical company Johnson & Johnson. Evotec announced success-related research and milestone payments of up to 210 million euros per project from the cooperation. Evotec will receive royalties on potential products resulting from the collaboration.
Trucker strike in South Korea disrupts Samsung’s chip production in China
Samsung Electronics’ semiconductor production in China is disrupted as a result of the trucker strike in South Korea. A South Korean company that produces isopropyl alcohol (IPA) for cleaning semiconductor chips is unable to ship the product to a Chinese company that supplies wafers to a Samsung Electronics chip fab in China due to the blockade of South Korean truckers, trade association Korea International Trade said Association (Kita) with. The export of 90 tons of IPA or a week’s delivery was delayed.
The truckers began walking out on June 7 in order to push through higher wages and a minimum wage guarantee in view of the sharp rise in fuel prices. This puts further pressure on the supply chains, which are already under strain around the world.
Hornbach Holding lowers profit forecast
The hardware store chain operator Hornbach Holding is more pessimistic about profit development in the current fiscal year due to rising prices and ongoing problems in the supply chains. Adjusted earnings before interest and taxes (EBIT) will fall by a low double-digit percentage in 2022/23 compared to the previous year’s figure of EUR 362.6 million. Previously, Hornbach had only assumed a slight minus. In terms of net sales, however, Hornbach is not making any changes to its expectations for the current year.