market report
Status: 10/25/2022 4:16 p.m
Domestic investors follow a rising Wall Street in the afternoon. The DAX moves towards 13,000 points. Meanwhile, the US reporting season reached its first peak today.
After the last two days of profits in a row, it looked as if investors would shift down a gear today. A weaker Ifo index, but also the interest rate meeting of the ECB on Thursday caused more restraint again. But new quarterly reports are well received on Wall Street and propel US markets higher.
With Wall Street, the DAX is back on its initial gains and is now just below the 13,000 point mark. In the daily low it had fallen back to 12,789 points. On Monday, the leading German index went out of trading with a premium of 1.6 percent at 12,932 points.
Linde before DAX farewell
However, the planned one proves to be a mood brake on the domestic market Linde withdrawal from the Frankfurt Stock Exchange. The share of the largest index heavyweight loses more than five percent in the afternoon and is one of the biggest losers.
Four years after the merger, the American-German industrial gases group wants linden tree have its shares traded only in New York. The Deutsche Börse is threatened with the loss of the most valuable member in its leading index DAX. According to the Linde management, the double listing in New York and Frankfurt has a negative impact on the valuation, said CEO Sanjiv Lamba.
Adidas clearance continues
Adidas share certificates collapse by around eight percent. After Kanye West’s anti-Semitic remarks the sporting goods manufacturer ended its collaboration with the US rapper, also known as Ye. The collaboration with Kanye West was a lucrative part of the business for the Franks, and the dissolution hits Adidas economically sensitive.
In the previous week, the sporting goods group from Herzogenaurach had issued another profit warning and thus accelerated the sell-off of the share. The paper has now fallen below 100 euros, just over a year ago the share was almost 300 euros.
ifo index continues to fall
All in all, it is currently questionable whether investors should orientate themselves upwards or downwards, despite the recent US interest rate speculation. Investors are hoping for an end to the aggressive rate hikes by the US Federal Reserve, but also by the ECB. The market observers at Helaba believe that the interest rate expectations are still there and the concerns about the economy have not diminished.
This is also shown by the current data from the ifo index: “The winter recession is coming,” said the head of the ifo surveys, Klaus Wohlrabe. In the current fourth quarter, gross domestic product is likely to shrink by 0.6 percent compared to the previous quarter. Almost two thirds of the companies would still suffer from delivery bottlenecks.
ECB interest rate decision pending
The European Central Bank will announce its interest rate decision next Thursday. In view of the inflationary pressure in the euro zone, which will probably continue to increase for the time being, the ECB should have no choice but to keep the brakes on,” commented Robert Greil, chief strategist at private bank Merck Finck.
The majority of economists are assuming a large rate hike of 0.75 percentage points. According to Greil, the currency watchdogs will only change course when the recession becomes clearly noticeable after the turn of the year. Rising interest rates are bad for the stock market because it makes bonds more attractive to investors.
Wall Street held up well at opening – Nasdaq on the up
The leading index Dow Jones stagnated in early business, but had recently risen sharply. On Friday and Monday it had increased by a total of almost four percent and had climbed to its highest level since mid-September. The Nasdaq technology exchange is clearly up more than one percent.
US investors have to process a plethora of new company reports today, including from the beverage giant Coca-Cola from the Dow Jones. Microsoft and Alphabet, two of the really big tech giants, present their figures after the trading day.
Coca-Cola deserves more
The US beverage giant Coca-Cola is earning brilliantly despite higher prices and fears of a recession. In the third quarter, the Pepsi rival increased profits by 14 percent over the previous year to $ 2.82 billion (2.86 billion euros), as announced today in Atlanta. Revenue increased 10 percent to $11.06 billion. Coca-Cola raised its sales target for the full year.
Despite significantly higher prices, the group can rely on robust sales of soft drinks, with its “Zero Sugar” cola in particular remaining a bestseller. In addition, many of the company’s tea, coffee and sports drinks are very popular. The quarterly report clearly exceeded market expectations. The stock is up almost 1 percent.
Apple relies on iPhone premium model
According to the market research company TrendForce, Apple is cutting production of its iPhone 14 Plus due to low demand. The production of the more expensive iPhone 14 Pro model, on the other hand, should be increased from 50 to 60 percent of total production, TrendForce reported. Amid the chip crisis and a sluggish period for smartphone sales, the US tech giant’s focus on premium devices could help it generate higher profit margins.
Rising US interest rates could constrain consumer spending and reduce demand for iPhones in the first quarter of 2023, leading to a 14 percent year-on-year drop in production to 52 million units. In the third quarter, Apple was the only one among the top five smartphone makers to post sales growth, expanding its market share from 15 percent to 18 percent, according to analytics firm Canalys, while the overall smartphone market shrank by 9 percent.
Euro remains relatively stable
The course of the euro tended to be at a higher level in the afternoon, little changed at $0.9945. “This week, the eyes will primarily be on the ECB meeting on Thursday,” said foreign exchange expert Antje Praefcke from Commerzbank. The prospect of an increase of 75 basis points and weak US economic data have recently supported the common currency.
Wintershall Dea jumps in profits
The oil and gas group Wintershall Dea earned significantly more in the third quarter than a year earlier thanks to the sharp rise in oil and gas prices. The group also benefited from higher production volumes. In the third quarter, earnings before interest, taxes, depreciation and exploration costs (Ebitdax) increased to almost 2.6 billion euros, as announced by the majority stake in BASF. A year earlier, Wintershall Dea reported EUR 983 million. The bottom line is that profit attributable to shareholders increased from 204 million euros in the previous year to 799 million euros. SASAP profit falls again
SAP at the top of the DAX
SAP cannot convert increasing sales into higher profits. Operating profit fell in the third quarter currency-adjusted by eight percent to 2.1 billion euros, SAP announced. The reason for this is lower contributions from software licenses and higher expenses in research and development as well as marketing.
Consolidated sales, on the other hand, increased by five percent to EUR 7.84 billion, as in the previous quarter. The driver was again the promising cloud business, which recorded a currency-adjusted increase of 25 percent to 3.29 billion euros. The better development is well received by investors, the share is at the top of the DAX.
Earnings slump at Covestro
High raw material and energy costs hit the plastics group Covestro from the DAX in the third quarter. With an increase in sales of 7.3 percent to 4.6 billion euros, the operating result (Ebitda) collapsed by 65 percent to 302 million euros. Covestro was only able to pass on the increased costs to a small extent, it said.
“Despite the significant burdens caused by the very high energy and raw material prices, we achieved our self-imposed Ebitda forecast in the third quarter,” explained CFO Thomas Toepfer. “Based on these results, we continue to assume that we will also achieve the goals we have set ourselves for the year as a whole.”
HSBC earns more operationally – depreciation pushes on surplus
The British bank HSBC benefited from rising interest rates worldwide in the third quarter. Adjusted earnings before interest rose 18 percent year over year to $6.5 billion, thanks to a significantly higher surplus in the lending and lending business. The bottom line is that the bank, which is mainly active in Asia, earned less due to a write-down on the business in France that was up for sale. The surplus fell by almost 40 percent to $ 2.6 billion.
Decline in profits at UBS
In the third quarter, UBS suffered from the difficult market conditions and earned significantly less than in the previous year. The bottom line is that the largest Swiss bank earned 1.73 billion US dollars in the summer quarter. This is almost a quarter less than in the corresponding period of the previous year, when UBS had still taken in over two billion.