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Market report: DAX investors digest interest rate rally

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market report

Status: 07/22/2022 07:51

After the ECB’s sharp rate hike, investors are starting to realize what this means for equity markets. The DAX is likely to enter the last trading day of the week with losses.

At the end of the week, the DAX should start trading XETRA at a discount. Broker IG estimates the 40 German standard values ​​lower by 0.6% at 13,172 points. Germany’s main index initially failed in its downtrend, which started at a year high and is currently around 13,250 points, then rebounded.

Negative signal for the DAX

DAX investors are still digesting the reversal in interest rates that started yesterday. With its first interest rate hike in eleven years, the ECB took an unexpected step of 50 basis points against escalating inflation.

Such a significant rise in interest rates is a negative signal for the stock markets in two respects. First, it makes stocks less attractive than bonds. Secondly, it shows how serious the situation is when even the hesitant and hesitant ECB President Christine Lagarde suddenly shakes off her timidity in the face of bold action and dares to raise interest rates sharply.

Is the ECB too late?

Other central banks like the US Federal Reserve (Fed) had already started the fight against inflation much earlier and with more commitment by raising interest rates sharply. From a global perspective, the ECB is clearly lagging behind with its interest rate hike, which has only just begun.

Many experts therefore fear that the ECB will now be forced to raise interest rates faster and more significantly at the next meetings than would have been necessary if it had intervened earlier.

Gas flow in Nord Stream 1 remains constant

After all, when the Baltic Sea pipeline was commissioned on Thursday, fears that Moscow might leave the tap permanently closed were initially unfounded.

According to network data, since the end of maintenance work, gas continues to flow on the Nord Stream 1 gas pipeline. Nevertheless, the government, companies and experts are preparing for the gas crisis to continue or even worsen. worsen.

Late rally on Wall Street

Good guidelines for DAX trading come from Wall Street. There, the major US indices accelerated again last night and closed at or near their daily highs.

The main US Dow Jones index rose 0.5% to 32,036 points since trading. The broad S&P 500 climbed 0.9% to 3,998 points. The tech-heavy Nasdaq rose 1.4% to 12,059 jobs.

Tesla attracts tech bargain hunters

The doubling of profits at US electric car maker Tesla has attracted bargain hunters, particularly in tech stocks. The company’s earnings may have been a little better than expected, said J. Bryant Evans, investment adviser and portfolio manager at Cozad Asset Management. “We investors think the tech sector in particular has fallen too far and there may be some good opportunities there.”

Mixed Asian exchanges

Meanwhile, Asian markets are on track for their best week in two months. The Tokyo stock market is also stronger at the end of the week. The 225-stock Nikkei index is up 0.5% shortly before the close. On the other hand, things are going down on the Shanghai Stock Exchange, the SSE Composite is currently down 0.3%.

The euro can’t hold the gains

In the aftermath of the ECB’s decision, the common European currency is again weaker. The euro failed to hold onto its gains, trading down 0.4% to $1.0183 at the start of forex trading. Yesterday the Euro jumped to $1.0276 for a short time after the ECB’s decision.

Major order for Siemens Energy

The energy technology group Siemens Energy has received a major order for the connection of several wind farms. In total, the lines are expected to bring up to 1.8 gigawatts of German North Sea power ashore, as the company announced yesterday. This meets the needs of 1.8 million people and is the largest offshore grid connection order Siemens Energy has ever received.

Infineon presents a new chip for digital locks

A new chip from Infineon should activate digital locks without their own power supply. Instead of batteries or a power connection, the user’s mobile phone – which is also the key – provides the energy needed to unlock the door. Data and energy are exchanged via NFC – a process used, for example, for payment transactions via smartphone.

Frankfurt Airport expects a rush to start the holiday season

Frankfurt Airport is expecting more passengers this weekend than it has since the outbreak of the corona pandemic in March 2020. According to operating company Fraport, Germany’s largest airport is waiting until 200,000 passengers on the last school day before the summer holidays in three German Länder, as well as on Saturday and Sunday. There weren’t many this year with a previous record of 180,000 vouchers.

Source www.tagesschau.de

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