Market report: investors remain very nervous


market report

Status: 06/23/2022 10:06

Alarmed by the surprisingly negative economic data, investors are parting ways with stocks again today. The DAX continues its descent and crashes under a major technical chart mark.

In early trading, the DAX fell around 1.4% to hit the 12,980 mark. “If the index breaks through the 13,000 point mark for a long time, a test of the year’s low at 12,438 points should be inevitable”, predict market observers from Helaba. The main German index was down 1.1% to 13,144 points yesterday after three friendly trading days.

Powell’s concern

The main topic in the market is once again the impending recession. The head of the US Federal Reserve, Jerome Powell, “didn’t really help calm things down” with his statements the day before, commented Commerzbank analyst You-Na Park-Heger.

Fed Chairman Powell said nothing surprising: on the one hand, he called the US economy “very strong” and able to withstand interest rate hikes. On the other hand, he admitted that a recession due to higher interest rates is “certainly a possibility”.

As far as Germany is concerned, this is also indicated by the first estimate of the purchasing managers’ indices for June: both the purchasing managers’ index for services and the index for industry were weaker provided that. The DAX then increased its losses after an already weak start.

Recession concerns weigh on Wall Street

Specifications for US stock exchanges are weak, partly due to recession fears. The Dow Jones closed down 0.2% at 30,483 points. The tech-heavy Nasdaq fell 0.2% to 11,053 points. The S&P 500 lost 0.1% to 3759 points.

Nikkei up, Topix down

There was no clear direction on Asian stock markets: the Nikkei closed up 0.1% at 26,171 points, the Topix index was down 0.1%. In China, investors are counting on new economic stimulus packages from the government. The Shanghai Stock Exchange rose 1.3%. Automotive values ​​in particular were in demand. State media, citing a cabinet meeting, reported that Beijing is keen to help the sector and boost demand.

Recession concerns are also weighing on oil prices

Oil prices fell again in early trading today. In the morning, a barrel (159 liters) of Brent from the North Sea cost 110.14 dollars. It was $1.60 less than the day before. West Texas Intermediate (WTI) barrel prices fell $1.79 to $104.40. Prices are hovering near their lowest levels in just over a month.

Oil prices are increasingly weighed down by fears of an economic slowdown. The background is the aftermath of the war in Ukraine and the struggle of many central banks with high inflation. Warnings of an impending recession are increasingly sounding in financial markets.

The crisis bank Monte Paschi plans a capital increase

The nationalized Italian crisis bank Monte dei Paschi di Siena (MPS) is planning a capital increase of around 2.5 billion euros to finance a new strategy. With that, net profit is expected to triple in the next three years, the bank said. Under the new business plan, MPS aims to reduce the cost share of revenue from 71% last year to 60% in 2024. The plan calls for the closure of eleven percent of branches and the voluntary departure of approximately 4,000 employees.

Musk: Tesla factories in Grünheide and Texas lose billions

According to CEO Elon Musk, the new Tesla factories in Grünheide and Texas are currently losing billions. The reason is a lack of batteries and supply chain issues due to the situation at Chinese ports. In Texas, only a tiny number of cars would roll off the assembly line at this time.

EU: fewer commercial vehicles allowed

Demand for commercial vehicles in the EU continues to weaken. In May, with 136,410 units, almost 18% fewer commercial vehicles were registered compared to the same month last year, according to the professional association Acea. Since the beginning of the year, the drop amounts to almost a fifth to 673,095 vehicles. At least the demand for heavy trucks and buses is picking up now. The overall decline is due to a drop in registrations of light commercial vehicles up to 3.5 tonnes, which account for the majority of registrations.

Microsoft: Ukraine’s allies targeted by Russian hackers

According to Microsoft, Russian hackers are attacking Ukraine’s Western allies on a large scale. The software group warned that it was particularly targeting government computers in NATO countries. The number one target is the United States, but overall Microsoft experts have identified Russian hacker attacks against 128 organizations in 42 countries outside of Ukraine.

Shortage of parts: VW cuts working hours and wages in Brazil

Volkswagen is cutting working hours and wages at its factory in Brazil due to supply bottlenecks. The union accepted the German automaker’s proposal to cut working hours by 24% and wages by 12% from July to prevent the closures, union representative Wellington Damasceno said. The deal will go into effect indefinitely from July 7, when workers are expected to return after a 10-day shutdown. The measure will be reviewed monthly and the end depends on the normalization of auto parts supply.

Netflix is ​​coming soon with ads

Shares of streaming provider Netflix rose in the US yesterday. Retailers attribute this to a report by the “Wall Street Journal” that Comcast, NBCUniversal or Google could partner with Netflix with a new ad-supported subscription option at a reduced price. Netflix announced a loss of 200,000 subscribers for the first quarter. The group had planned 2.5 million new customers.

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