Market report: Stock market evening abruptly interrupted

Market report: The interest rate discussion is in full swing

market report

Status: 08/17/2022 10:15 p.m.

Frightened by high British inflation, European markets were under severe pressure. Wall Street investors took a more relaxed view of the situation.

Was today’s bout of stock market weakness the start of a major downturn or just a temporary correction? If Wall Street investors are successful, the latter is true. The Americans, who had begun to trade unsteadily, sometimes even let the Dow Jones climb in the dark. At the end of the trading session, the main US index was down a moderate 0.5%.

Tech stocks on the Nasdaq 100, on the other hand, lost a sharper 1.2%. The minutes of the last US Federal Reserve (Fed) meeting, which were released in the evening, were responsible for the interim recovery in prices. One statement in particular appealed to investors: “Participants felt that as monetary policy tightens further, it will likely be appropriate at some point to slow the pace of interest rate increases,” the lawsuit states. -verbal. Next, the impact of interest rate movements on economic activity must be assessed.

Equity markets can therefore hope that the high pace of interest rate increases will likely slow for the foreseeable future. The US Federal Reserve raised its key rate by 0.75 percentage point to between 2.25 and 2.50% at the meeting at the end of July. Monetary politicians will meet again in just over a month and the majority of market participants are currently expecting interest rates to rise by half a percentage point.

In contrast, US retail sales in July did not support the market. They stagnated compared to June and are thus below the forecast of a minimal increase of 0.1%.

DAX loses 2%

European stock markets had previously collapsed. The trigger was the UK inflation data released in the morning. The already high inflation has accelerated further on the island. In July, British consumer prices increased by 10.1%. This is the highest rate since 1982. On average, analysts were only expecting an increase of 9.4 to 9.8%.

As a result, Germany’s main DAX index has steadily declined since the start of trading and ended down 2.04%.

There was also weak growth data from the Eurozone. In the second quarter, the gross domestic product (GDP) of the 19 countries of the euro zone recovered by only 0.6% compared to the previous quarter. In its first estimate, the statistics office Eurostat determined growth of 0.7%. In the first quarter, growth was 0.5%. Compared to the corresponding period of the previous year, the euro area grew by 3.9%. Four percent was originally determined here.

Economy update from 08/17/2022

Klaus-Rainer Jackisch, HR, 17.8.2022 09:58

The euro demanded after the Fed protocol

The Fed minutes were also interpreted in the currency market as an indication of a less steep path for US interest rates. The euro then temporarily recovered in the evening to 1.02 US dollars.

US oil exports at record highs

Oil prices stabilized after yesterday’s drop. A barrel of Brent from the North Sea cost 93.30 dollars in the evening. US crude oil inventories have fallen surprisingly and significantly over the past week. It could also be linked to the fact that US oil exports hit a record 5.0 million barrels per day. The previous week, the value was still 2.1 million barrels. Europeans are increasingly substituting US oil for Russian crude oil. The prospect of a return of Iranian oil to the world market had recently led to a drop in prices on the oil market.

Uniper hopes for improvement

Uniper shares fell significantly by 12.1%. Germany’s largest gas importer suffered a loss of more than twelve billion euros in the first half. Of this amount, 6.5 billion euros are linked to gas supply interruptions from Russia. In addition, the already known total of 2.7 billion euros in write-downs is included – including for the Baltic Sea gas pipeline Nord Stream 2. Since the reduction in Russian gas supply volumes in mid-June , the MDAX Group wrote on average more than 60 million euros per day, according to its own statements Loss. From October 1, these losses will be largely absorbed by the gas surcharge. “Losses will be significantly lower from the fourth quarter onwards,” chief financial officer Tiina Tuomela said today. Uniper sees 2022 and 2023 as transition years.

Pressure delivery services

Shares of listed delivery services were particularly under pressure today. In the DAX, mail-order recipe box company HelloFresh and fashion retailer Zalando each lost more than seven percent. Delivery Hero lost 2.35% in the MDAX after its strong rise the previous day. Critical industry reports dampened sentiment.

GM with a huge recall campaign

The largest American car manufacturer General Motors (GM) has to repair many SUVs due to possible faults in the seat belts. According to the U.S. Department of Transportation, 484,155 large Cadillac Escalades, Chevrolet Suburban and Tahoe city SUVs, and GMC Yukon models built in 2021 and 2022 are affected. The cars may have seat belt attachment defects in the third row of seats, that may require replacement require components, GM told the Highway Safety Inspectorate.

Musk moves ManU shares

In European trading, sales of Manchester United shares soared early in the morning. Eccentric tech billionaire Elon Musk had caused an uproar in the sports world overnight with a tweet. “I’m also buying Manchester United. You’re welcome,” the 51-year-old wrote on Tuesday evening on the social network, where he has more than 103 million followers. Four hours later, he rowed: “This is a longtime Twitter joke. I don’t buy sports teams,” the Tesla boss tweeted. “Stand-up is my side business.”

But a report from the British “Times” got the action moving. A spokesman for British billionaire Jim Ratcliffe has confirmed his potential interest in joining the struggling Premier League club. ‘Bloomberg’ previously reported that United owning family Glazer are keen to sell a small stake in the club.

Cineworld shares fall

Cineworld suffers from the lack of blockbusters. The world’s second-largest cinema operator has announced that the lack of cinematic successes is affecting revenues. This is likely to complicate efforts to reduce the UK company’s debt burden, which stood at almost $9 billion at the end of 2012. The stock has fallen more than 50%. Cineworld is present in ten countries – including the United States, Great Britain and Germany – on more than 9,000 screens.

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