market report
Status: 09/09/2022 4:25 p.m
The DAX expands its gains in the afternoon and establishes itself above the 13,000 point mark. The market is thus putting away the ECB’s historic interest rate hike from the previous day and is showing strength.
Things can sometimes go that fast on the stock exchange. A day after Record rate hike by the European Central Bankalong with a pessimistic economic outlook from ECB boss Christine Lagarde, the mood on the stock market is much better again.
The DAX passes the 13,000 point mark and gains more than one percent. The daily high was 13,121 points so far. In a weekly comparison, this indicates a zero-sum game for the leading index.
The effects of the interest rate hike by the ECB remained “manageable” on the stock market, as Thomas Altmann from asset manager QC Partners noted. Ultimately, the step was expected.
One almost thinks that the relief on the market can be felt with one’s hands now that the ECB, after much hesitation, has now also taken up the fight against inflation. Nevertheless, it lags far behind in the interest rate cycle, especially compared to the US Federal Reserve, so that further interest rate hikes are expected.
“Inflation remains unacceptably high,” Slovakia’s central bank governor Peter Kazimir said in a commentary published on the bank’s website. “The priority now is to vigorously continue the normalization of monetary policy.” His ECB Council colleague Klaas Knot, the central bank chief of the Netherlands, made a similar statement. Even if this slows down economic growth, the path taken must be maintained.
13,000 DAX points in focus
It will now be important whether the leading German index can defend the 13,000 point mark. For technically oriented investors, the jump above indicates that the German stock market has bottomed out. A slide below yesterday’s daily low (12,689 points) should be avoided in order not to jeopardize the positive scenario.
China data help
According to stockbrokers, new economic data from China, where producer and consumer prices rose less than expected in August, will also have a supportive effect before the weekend. This fuels hopes that the government in China can stimulate the economy without having to worry about inflation.
Bank shares asked after ECB decision
In an environment of rising interest rates, banks are among the natural winners: the lending business becomes more lucrative and income increases. Across Europe, the sector index Stoxx Europe 600 Banks is therefore again among the best sectors. In the DAX, the Deutsche Bank share is up almost two percent. In the MDAX, Commerzbank shares have risen to their highest level since the end of June; most recently they increased by more than four percent.
Win in New York too
US markets continue yesterday’s late gains and open on a friendly note. The leading index Dow Jones rose around 0.6 percent, the technology-heavy Nasdaq is up around 0.8 percent.
The focus of US investors’ attention is currently the central banks’ fight on both sides of the Atlantic against high inflation. In the USA, economist Ralfcircul from Helaba sees a chance of a turnaround in inflation. However, if inflation continues to be high, there is still no reason for the Fed to back away from the aggressive turnaround in interest rates, he said.
“It seems possible that a September low occurred early, an autumn storm was already priced in and that the coming months will be positive overall,” says market expert Robert Rethfeld from Wellenreiter-Invest.
Euro again well above dollar parity
In the wake of the ECB decision, the euro is showing strength in currency trading today. The European common currency is clearly rising above dollar parity. In the afternoon, it gains 0.5 percent to above $1.0046. Parity is a one-to-one exchange rate between two currencies.
“The interest rate differential against the US dollar has now narrowed,” notes IG market analyst Salah-Eddine Bouhmidi. “However, the Fed meeting is already in two weeks and could put pressure on the euro again.”
Oil prices on the rise again
Oil prices can also benefit from the weaker dollar and investors’ increasing appetite for risk. A barrel (159 liters) of North Sea Brent is traded almost three percent higher. Midweek oil prices had fallen to multi-month lows. While a barrel of Brent cost the lowest price since February, a barrel of WTI has at times cost less than it has since January.
Bitcoin reclaims $20,000 mark
After the price losses of the past few weeks, investors are stocking up on Bitcoin again. The cyber motto has increased in price by more than eight percent to just over $21,000. “Bargain hunters are on the prowl again,” says analyst Timo Emden of Emden Research. “It remains to be seen whether the recovery attempt will be sustainable.”
Gas importer VNG in financial difficulties
The gas importer VNG got into financial difficulties during the energy crisis. The company, a majority holding of the Karlsruhe energy supplier EnBW, will submit an application for stabilization measures to the Federal Ministry of Economics today, announced EnBW. According to the information, the Leipziger Verbundnetzgas AG (VNG) is the third largest German gas importer and accounted for around a fifth of the gas requirements in Germany in 2021.
Falling gas prices boost Uniper shares
Slacking gas prices bring some relief to Uniper shareholders. The papers of the ailing power plant operator temporarily returned above the five euro mark with a price jump of up to 13.7 percent. It was only on Wednesday that they had marked their record low of EUR 4.19. The price of the TTF futures contract for Dutch natural gas fell by around seven percent today, staying close to the EUR 200 mark.
Fresenius is enthroned at the top of the DAX
In the DAX, the Fresenius share is the biggest gainer with an increase of around 3.7 percent. Industry expert Justin Smith from the French bank Societe Generale (SocGen) considers the paper to be “surprisingly mispriced”, with the business prospects not being adequately taken into account. The expert reiterated his buy recommendation and underpinned it with a target price of EUR 92 – almost four times the current share price.
Telekom sought after T-Mobile US share buyback
The T-Share is one of the strongest stocks in the DAX today. Because prospective share buybacks of the Telekom-US subsidiary T-Mobile US are well received by investors.
With the planned purchase of its own shares worth up to 14 billion US dollars within twelve months, the US subsidiary could help its mother to achieve the long-awaited majority of shares. According to a retailer, the announcement is positive, even if the scope did not quite meet expectations. So far, however, it is not yet known how Telekom will behave in the course of the measure.
According to analyst Stan Noel von Bernstein, the share could reach the 50 percent threshold in the third quarter of 2023. When shares are retired, the number of all outstanding shares decreases. If Telekom does not sell any shares, its stake will automatically increase.
BMW announces batteries with significantly more power
BMW wants to significantly improve the range and charging time of its electric cars from 2025 with new battery cells and halve the manufacturing costs of the batteries. Development board member Frank Weber said today: “The energy density is increased by more than 20 percent, the charging speed is increased by up to 30 percent and the range is improved by up to 30 percent.” In addition, the CO2 emissions during cell production are reduced by up to 60 percent.
Formula 1 entry of Porsche with Red Bull burst
The VW subsidiary Porsche and the Red Bull racing team have theirs Formula 1 plans buried. Talks have been held over the past few months. “Both companies have jointly come to the conclusion that these talks will not be continued,” said Porsche. The premise was always a partnership at eye level, which would have included the team in addition to an engine partnership. “This could not be realized.”
Airbus delivers fewer machines in August
The world’s largest aircraft manufacturer Airbus has to keep up with its annual target after declining deliveries in August. In the past month, only 39 commercial aircraft found their way to customers. In the first eight months, the manufacturer has delivered 382 machines. That’s just a little more than half of the 700 jets that CEO Guillaume Faury announced at the end of July as the new delivery target for the current year.
Citi wins wire transfer litigation
The major US bank Citigroup has prevailed in the legal dispute over the reimbursement of around half a billion dollars that was accidentally transferred. A Manhattan appeals court overturned the lower court’s verdict and ruled that the financial group was entitled to the money. The recipients should have been aware that the transfer was a glitch, the judges reasoned.
Poland wants to buy military helicopters from Boeing
To further strengthen its army, Poland plans to procure a larger number of US-made military helicopters. Defense Minister Mariusz Blaszczak announced yesterday that Warsaw has submitted a request to the US to purchase 96 Apache attack helicopters. The manufacturer of the Apache attack helicopters is the US company Boeing.