market report
Status: 05/26/2022 10:12 p.m
Concerns regarding interest rates are disappearing on the stock exchanges. The sluggish US economy might prevent the Fed from more aggressive rate hikes, investors are hoping. Share prices therefore recovered strongly on Ascension Day.
“Sell in May… and go away” (Sell in May and get out of stocks!) – Anyone who has stuck to this old stock market adage so far this year has been partially right. Wall Street prices have been falling since early May. Tech stocks in particular suffered heavy losses.
Relief rally on Wall Street
But now the mood might change. In the last two trading days, the US stock market has recovered noticeably from the recent setbacks. On Thursday alone, the Dow Jones rose by 1.6 percent and jumped to over 32,600 points. The price gains in the badly battered technology stocks were even greater. The Nasdaq index jumped a good 2.8 percent.
Fed not hinting at aggressive rate hikes
The fear of massive rate hikes by the Fed is gradually fading. In the minutes of the last meeting, the US Federal Reserve signaled cautious 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.
Shrinking US economy also has something good
In addition, the looming recession in the USA might prevent the Fed from tightening monetary policy. Thomas Hayes, manager at asset manager Great Hill, sees the US economy, which shrank even more sharply than expected in the first quarter, as a sign that monetary authorities might slow down their 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.
US retailers raise annual targets
Another bright spot today was provided by encouraging numbers and outlook from US retailers. The department store chain Macy’s exceeded expectations in terms of earnings and the annual forecast. In addition, the two discounters Dollar General and Dollar Tree raised their sales targets for the current year. Because of inflation, many consumers have to turn over every dollar twice, experts said. In the meantime, many of those who would have previously avoided cheap providers also bought there. The shares of the discounters rose by up to 21 percent. The Macy’s course also managed a price increase of almost 18 percent at times. Last week, retailers Wal-Mart and Target scared investors away with disappointing numbers.
New boost for the DAX
In the wake of the strong Wall Street, the Dax recorded the largest daily gains in two weeks on Ascension Day. 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
The revised GDP data and Fed minutes weighed some on the US dollar. The dollar index, which tracks rates once morest major currencies, was just above Tuesday’s four-week low at nearly 102 points. In return, the euro appreciated. The common currency surged 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. This was announced by the monetary authorities at an extraordinary meeting. After the interest rate decision, the central bank stated that the framework conditions for the Russian economy, i.e. the sanctions, remain “challenging” and “significantly hinder economic activity”. Russian authorities are trying to stabilize the ruble following the currency rose to a seven-year high despite the Ukraine conflict. The interest rate meeting of the central bank was actually only planned for June 10th.
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 regarding 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.
Twitter shareholders are suing Elon Musk
Shareholders of the short message service have sued Tesla boss Elon Musk. They accuse the billionaire of improperly saving $156 million by failing to announce the purchase of more than 5 percent of Twitter by March 14. Rather, Musk only announced in early April that he held 9.2 percent of the company, according to the lawsuit, which was filed in federal court in California. Since Musk initially benefited from a comparatively low price, it was a form of market manipulation.
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?
After a weak start to trading, Apple shares turned positive and gained around two percent. According to insiders, the iPhone manufacturer has doubts regarding 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.
