Market report: another day of recovery

Market report: another day of recovery

market report

Status: 06/21/2022 10:13 p.m.

After last week’s heavy losses, prices have recovered today. There was an unusual amount of business news.

After its holiday break, Wall Street started the week with strong premiums. The flagship Dow Jones index gained 2.15%, while Nasdaq 100 technology stocks even gained 2.5%.

The recent selloff obviously went too far for many market players. The mood was also buoyed by US President Joe Biden’s statement that a US recession was “not inevitable”. Meanwhile, sales of existing homes fell again in May. Compared to the previous month, the number of sales fell by 3.4%, the fourth consecutive decline. However, analysts expected a slightly stronger minus of 3.7%.

In the meantime, a mild economic slowdown is likely priced in, said Thomas Hayes, director of wealth manager Great Hill. At the beginning of the year, the US economy contracted and this will probably also be the case in the second quarter.

DAX creates another advantage

After a strong start, the DAX only managed a modest 0.2% gain today. Nevertheless, the index was able to gain three days in a row for the first time in three weeks.

However, market experts remain skeptical: “Overall, the downtrend is already confirmed and initiated in terms of graphics technology,” says Salah-Eddine Bouhmidi of broker IG. The trend that has been established since January is currently around 13,477 points. However, the DAX was unable to meet this target with a daily high of 13,444 points. “In order to control runaway inflation, all that remains is to raise interest rates faster than expected,” says Bouhmidi. “Hope is currently only offered by the belief that the ECB will find common ground.”

BDI lowers economic forecasts

From an economic point of view, the market is currently in a kind of dilemma: according to Helaba experts, valuation levels on the stock markets have fallen due to recent price declines. However, it’s unclear what kind of data could give the market a lift: “Good economic numbers would fuel interest rate discussion, while weak numbers would bolster fears of a recession. two limit price potential,” according to their valuation.

In this context, investors cannot be satisfied with the new economic forecasts of the Federation of German Industries (BDI): economic growth of only 1.5% is expected. At the beginning of the year, before the war, the BDI was still counting on growth of 3.5%.

Economy update from 06/21/2022

Bettina Seidl, HR, June 21, 2022 09:58

Oil prices are on the rise again

Prices on the oil market rose slightly again. A barrel (159 liters) of Brent from the North Sea costs $114.50 in the evening. Market players are worried about a shortage of supply.

“Supply issues are likely to persist in the coming months as OPEC+ countries, the world’s largest oil producers, may not have enough available capacity,” said DailyFX analyst Leona Liu. In addition, the summer travel season and China’s easing of corona restrictions boosted demand. The oil price cap imposed by US Treasury Secretary Janet Yellen had little impact on the market.

Bitcoin is catching up

Along with the stock market, cryptocurrencies also rallied. Bitcoin regained strength above the $21,000 mark. The market is apparently benefiting from the rise in price of the troubled crypto bank Celsius, said analyst Timo Emden of Emden Research. “Investors are desperate for the company to rebound.”

Kellogg wants to separate

Kellogg was a favorite on Wall Street, with a price increase of more than five percent at times. The cornflake supplier wants to split into three companies. The North American cornflakes and other breakfast cereals business and the vegetarian and vegan meat substitutes business, which together account for around 20% of group sales, are to be split. In the future, the group intends to focus on global trade with snacks such as “Pringles” and “Nutri Grain” bars as well as trade in breakfast cereals outside the United States. , Canada and the Caribbean. Credit Suisse analyst Robert Moskow said the new strategy would give the sluggish U.S. breakfast cereal business a chance to rebound. Additionally, the likelihood of a sale from the vegan food division increases.

Tesla cuts up to 3.5% of jobs

Electric car maker Tesla will cut 3-3.5% of its jobs in the coming months, company boss Elon Musk has said. About one in ten jobs among employees will be lost, while the number of factory workers will increase in the long term. At the start of the year, the company had nearly 100,000 employees. Musk said in a video interview at the Qatar Economic Forum conference that Tesla sometimes creates jobs too quickly.

Twitter continues to lean on Musk

Meanwhile, Twitter’s board is sticking to the plan to sell the US short message service to Elon Musk for around $44 billion – even after the tech billionaire’s ricochets. As in May, the board reiterated its unanimous support for Musk’s $54.20 per share offer. The paper was then listed but still low at $38.40. Musk has meanwhile suspended the deal because he doubts Twitter’s information on the number of fake accounts. From the online service’s point of view, however, it cannot unilaterally suspend the agreement. Musk has now stressed that he still needs to secure financing for the deal and gain majority approval from Twitter shareholders for the takeover. He already owns a good nine percent stake.

Blow for Bayer

Bayer stock was under pressure in the afternoon. America’s highest court, the Supreme Court, has dismissed an appeal by DAX in a landmark glyphosate case. The rejection came as no real surprise, as the US government had already recommended the move. Had it been heard and Bayer had won, it would have been easier for the people of Leverkusen to draw a line under the costly legal dispute over the alleged cancer risks of weedkillers containing glyphosate. This hope is now disappointed.

US verdict hits FMC hard

Soon after, shares of FMC and its parent company Fresenius were hit even harder, falling to the bottom of the DAX. FMC’s stock is now at an 11-year low. The US Supreme Court has ruled against FMC competitor DaVita in a dispute over the amount of reimbursements for certain dialysis patients. This has seriously dampened hopes of increased revenue for some dialysis services in the United States. Jefferies Research analyst James Vane-Tempest was surprised by the news. Contrary to popular belief, the decision was not in favor of DaVita. He continues to negatively rate FMC stocks as “underperforming.”

Post buys in Australia

Deutsche Post expands supply chain logistics business with acquisition in Australia. The DHL Supply Chain division takes over the Australian logistics company Glen Cameron Group. One of the largest logistics companies in the country will be created with a total turnover of over A$1 billion. According to a spokesperson, DHL Supply Chain currently employs around 4,000 people in Australia. The acquisition would add more than 820. The seller was the company’s founder, Glen Cameron himself, but The Post would not comment on the purchase price.

The Federal Cartel Office initiates proceedings against Google

The Federal Cartel Office is investigating US tech giant Google over possible restrictions on competition in map services. Competition watchdogs are using the powers granted to them in 2021 to ensure competition in the internet economy. “We are investigating reports that Google limits the combination of its map services with third-party map services. This concerns, for example, the possibility of integrating location data from Google Maps, the search function or Google Street View on non-Google maps,” Cartel Office chairman Andreas Mundt said.

Easyjet wants 56 more Airbuses

British low-cost airline Easyjet wants to accelerate the renewal of its aircraft fleet with a major new purchase from Airbus. The plan is to purchase 56 medium-range jets from the A320neo model family. To this end, they entered into a conditional agreement with Airbus. According to the information, Easyjet is exercising purchase rights and options from a previous contract. In addition, the low-cost airline is following the trend towards larger machines: instead of the 18 aircraft already ordered in the standard A320neo version, Airbus is to deliver the same number of jets in the long A321neo version.

Airbus wants to expand its business with large capacity vans

The aircraft manufacturer Airbus, for its part, wishes to develop its activity with high-capacity transporters for military and civil applications. “With the failure of the Antonov fleet, a vacuum has now been created in the field of wide-bodied transport aircraft. We want to prove ourselves in this market with the Beluga,” said Michael Schöllhorn, Head of armaments division of Airbus. For him, a “personal highlight” of the show will be the carrier Airbus Beluga XL.

Decline in sales at Nordex

Hamburg-based wind turbine manufacturer Nordex has been affected by the shift in production to other blades and a smaller number of installations. In the first quarter, sales fell by a quarter to 933 million euros. Due to a hacker attack, Nordex was unable to present its quarterly figures on time in May and therefore had to vacate its spot in the SDAX small cap index for the time being.

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