market report
As of: 08/26/2022 6:24 p.m
Massive interest rate worries on the part of investors pushed stock prices down significantly at the end of the week. In the fight once morest inflation, the markets must be prepared for strong interest rate hikes.
Investors head into the weekend with massive interest rate worries. In the followingnoon, the head of the US Federal Reserve, Jerome Powell, confirmed the continuation of the Fed’s stringent interest rate course and announced a further restrictive monetary policy in an eagerly awaited speech following the central bank meeting in Jackson Hole.
Then, when rumors surfaced that the ECB was also considering a major rate hike of 75 basis points in September, there was no stopping them. Up until now, the markets had assumed that the ECB would increase interest rates by 50 basis points.
In the end, the DAX closed at 12,971 points, down 2.26 percent. It has thus left its sideways trend of the last few days and has broken out below the 13,000 point mark. At the daily high, the index had risen to 13,375 points before it began to crumble in the course of trading.
Powell leaves no doubt – stock markets are tumbling
Not only the DAX, but also the major US stock indices are under pressure following Jerome Powell’s speech. On Wall Street, the leading index Dow Jones is currently down 1.8 percent, and the particularly interest-sensitive technology exchange Nasdaq is down around 2.7 percent.
“Restoring price stability will likely require continued tightening monetary policy for some time,” said the Federal Reserve Chairman. In addition, historical experience speaks once morest easing monetary policy too early.
However, Powell did not yet give clear signals for the next meeting. “Our decision at the September meeting will depend on the aggregate of incoming data and the evolving outlook,” the central banker said. However, another “extraordinarily large” rate hike might become necessary.
“The Fed remains more concerned regarding a consolidation of exceptionally high inflation than it was before a recession,” commented Hauck Aufhäuser Lampe’s Bastioan Hepperle. “The Fed does not commit itself to the speed and extent of future rate hikes, these depend on the economic data. All in all, nothing new. The Fed is given the greatest possible leeway,” the expert continued.
Update economy from 08/26/2022
Klaus-Rainer Jackisch, HR, 26.8.2022 9:38 a.m
Does Amazon Buy Electronic Arts?
Among the US individual stocks, things were already quite turbulent in pre-market trading today. Electronic Arts (EA) shares initially rose by around 14 percent following US media reported that the retail and media group Amazon had made a multi-billion bid to buy the online game developer.
Shortly therefollowing, the business TV channel “CNBC” reported that Amazon was probably not interested in EA, following which the EA papers sagged once more. The Amazon titles hardly reacted to the rumors, but are currently falling behind with the weak overall market.
euros a little higher
The interest rate debate is also a big topic on the foreign exchange market. The euro is struggling with parity once morest the dollar, gaining some following new US price data. The European Central Bank (ECB) set the reference rate at 1.0007 (Thursday: 0.9970) dollars. At the start of the week, it had fallen to its lowest level in 20 years at $0.9899.
US bond market a little more relaxed following new price data
The new data on price developments in the US have limited the price losses of fixed income in the US bond market somewhat. They show a slowdown in inflationary momentum. The price index for consumer spending, which is closely watched by the US Federal Reserve, fell in July from 6.8 percent to just 6.3 percent. However, the market decline was roughly what was expected. Ten-year US Treasuries are yielding slightly higher at 3.02 percent.
Oil prices cannot hold gains
After initial gains, oil prices have now turned negative once more. In the late followingnoon, a barrel (159 liters) of North Sea Brent costs US$ 99.52. That’s 0.5 percent less than the day before. On a weekly basis, however, the prospect of a possible throttling of the production volume by the OPEC+ oil network drove prices on the oil market up sharply overall.
Mercedes-Benz, BMW and VW in focus
Among the individual stocks in the DAX, the car stocks came into focus. The planned changes to the so-called environmental bonus for electric vehicles are likely to have a particularly negative impact on German premium manufacturers.
According to a response from the federal government to a request from the CSU member of the Bundestag Ulrich Lange, only very few of the battery vehicles on offer from BMW, Mercedes-Benz and Audi will be eligible for funding from 2024, as reported by the “Augsburger Allgemeine”. At the end of the day, however, it was not just the car shares that fell significantly in a weak overall market.
Audi will enter Formula 1 in 2026
The entry of the VW premium brand Audi into Formula 1 for the 2026 season is perfect, but initially only as an engine manufacturer. “I am very pleased to be here for this really, very special moment,” said Audi boss Markus Duesmann during a press conference ahead of the Grand Prix in Spa-Francorchamps, Belgium: “We will be driving in Formula 1 in 2026.”
Fresenius is probably putting the partial sale of Helios on hold
According to a media report, the new Fresenius boss probably wants to suspend the partial sale of the Helios clinic chain. One expects “that this will be blocked”, quoted the “WirtschaftsWoche” today from negotiating circles. The new Fresenius boss Michael Sen, who will succeed incumbent Stephan Sturm on October 1, first wants to form his own opinion, the magazine reported, citing Fresenius’ environment.
Airbus is “urgently looking for employees”
The aircraft manufacturer Airbus is looking for more than 1,000 new employees for the planned ramp-up of production by mid-2023 alone. After production was drastically reduced during the corona pandemic, it is now set to gradually increase once more – up to the record level of 75 machines from the A320 family in 2025.
Lufthansa pilot strike does not take place for the time being
In the collective bargaining dispute with Lufthansa, the pilots do not want to go on strike for the time being and instead want to negotiate once more. A spokesman for the Vereinigung Cockpit union (VC) told the Archyde.com news agency on Friday that the thread of talks with Lufthansa will be resumed on Tuesday. “Until then there will be no strikes.”
Lufthansa confirmed that another negotiation date had been agreed. On Thursday, the union had rejected an offer from Lufthansa as insufficient and said there might be industrial action immediately.
SAS still deep in the red following pilots’ strike
Due to the long pilots’ strike in the summer, among other things, the ailing Scandinavian airline SAS made large losses in the past quarter despite higher demand. Between May and July, the company’s third quarter, the bottom line was a net loss of around 1.85 billion Swedish crowns (almost 175 million euros).
Container companies bury takeover plan
Shipping container maker Maersk and China International Marine Containers Group have shelved plans to merge their refrigerated container businesses over concerns by antitrust watchdogs in Germany and the US. Maersk said the company regrets the failure of the nearly $1 billion takeover of its division by the Chinese group.
Panasonic is considering another battery factory
According to a media report, the Tesla supplier Panasonic is considering building another battery factory in the USA for four billion dollars. Appropriate talks are currently being held, the Wall Street Journal reported, citing people familiar with the matter. Panasonic is considering Oklahoma as a location for its new plant.
Dell suffers from strong dollar
The US computer group Dell has reported the lowest sales growth in six quarters due to the strong dollar and renewed corona outbreaks in the important customer country China. Revenue for the fiscal quarter ended July 29 increased 9 percent from the prior-year period to $26.4 billion. Net income from continuing operations fell to $506 million from $629 million.
Twitter has to release some data
Partial success for Elon Musk: According to a court decision, he must be given access to Twitter data collected in an audit of active users in 2021. However, other demands made by Musk to avert the takeover have been dismissed as “absurdly broad”.
Boeing: manned test flight with Starliner space capsule in February
The US aviation group Boeing wants to complete a first manned test flight with its Starliner space capsule in February. As Boeing and the US space agency NASA announced yesterday, the astronauts Barry Wilmore and Sunita Williams are to fly the capsule to the International Space Station ISS and dock there for eight days.
