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Market Report: DAX regains 16,000 points


market report

By: July 12, 2023 at 6:09 pm

The DAX posted its fourth straight session of profit after a sharp sell-off at the start of the month. The latest U.S. inflation data lifted markets. Prices also climbed again on Wall Street.

Four days down, then four days up: There’s a lot of excitement in the stock market these days. The middle of the week, possibly the most important date of the week for stocks, accelerated price gains. The long-awaited US inflation rate was 3.0%, the lowest since March 2021. “This is a long-awaited liberation,” said Thomas Altmann, portfolio manager at asset manager QC Partners. Germany’s DAX rose 1.47 percent, breaking the 16,000 mark for the first time since last Tuesday.

Even if inflationary pressures remain high, the decline in inflation increases the likelihood that the Federal Reserve monetary authority will end its rate hike process for the foreseeable future.

Wall Street has also gratefully received the figures. The Dow was up 0.6% in the first hour and a half of trading, but has moved sharply higher in the interim.

Tech stocks, which are typically more interest rate sensitive, are doing even better. The Nasdaq 100 has risen more than 1% at times and is currently about 0.75%.

The euro surged after the release of U.S. inflation data. The euro traded around $1.1120, rising to its strongest level since March 2022. The current price of gold per troy ounce is $1954.80.

Oil prices also reached their highest level in more than two months. A barrel (159 liters) of Brent North Sea crude for September delivery was at $80.20 in late afternoon. This is a 1.1% increase from yesterday. The prospect of reduced supply has boosted prices in recent days. Two major producers, Saudi Arabia and Russia, have announced appropriate measures for August.

Meanwhile, U.S. oil stockpiles have unexpectedly increased over the past week. Crude inventories rose by 6 million barrels last week to 458.1 million barrels. Oil production fell by 100,000 barrels per day to 12.3 million barrels.

In the afternoon, Continental unexpectedly released preliminary key figures for the past second quarter. The auto supplier’s April-June sales of 10.4 billion euros were broadly in line with expectations. Overall, Conti’s operating margin, adjusted for special effects, was 4.8%, thanks largely to a strong tire business — about 1 percentage point below expert estimates. In contrast, the operating business of the automotive supply industry recorded a loss. However, the DAX Group confirmed its annual outlook for the sector. Kandi did not initially provide net profit information.

About You rose 40 percent to 6.06 euros, a record price increase. The company achieved an operating result of 4.2 million euros in the first quarter of the 2022/23 financial year, after a loss of 28.8 million euros a year earlier, mainly due to lower marketing expenses.

About You’s surprise move into the profit zone also helped rival Zalando achieve significant price increases. Shares of the online fashion retailer rose more than 10 percent in the DAX index.

FMC stock rose to its highest level in nearly a year. The reason is a fresh buy recommendation from Goldman Sachs, with the stock now recouping more than half of its losses since April 2022 as prices recover from late October lows.

After the upgrade, Infineon shares were among the top gainers on the DAX. Analysts at Jefferies upgraded their rating from “underperform” to “hold” and raised their target price from 28 euros to 40 euros. Analyst Janardan Menon expects strong earnings growth over the next two years and a sharp stock revaluation.

Automaker Porsche delivered 167,354 vehicles in the first half of the year, about 15 percent more than in the same period last year. In Europe and the domestic market, Porsche AG achieved the greatest growth. In Germany, the number of vehicles delivered in the first half of the year rose by 24%.

In order to join Formula 1 in 2026, Volkswagen subsidiary Audi will effectively cease its motorsport commitments in all other areas. As a result, customer teams participating in the German Touring Car Masters (DTM) and 24-hour races such as the Nürburgring or Spa will no longer be financially supported. The Dakar Rally Factory project will also end after 2024.

Deutsche Post DHL wants to grow in Latin America. The Bonn-based subsidiary DHL Supply Chain will therefore invest around 500 million euros in the region until 2028. The funds will be used to expand infrastructure and transport capacity. The Financial Times had previously reported on this.

Truck maker Daimler Trucks is raising its return target to more than 12% by 2030. “We are ready to take Daimler Trucks to the next level by 2030,” CEO Martin Daum stressed yesterday at the U.S. East Coast Capital Markets Day in Boston. The truck market leader is targeting returns of up to 10%.

Drugmaker Stada is beefing up its over-the-counter supplements business and taking over other brands from French pharmaceutical group Sanofi, including the entire Antistax brand, which treats venous disease. The company did not disclose the purchase price. The acquisition is expected to close in the fourth quarter.

Microsoft is one giant step closer to acquiring video game giant Activision Blizzard. A judge in San Francisco yesterday rejected a request by the U.S. government to block the deal with an injunction. Microsoft is now considering new concessions to Britain’s competition authority, the CMA. Their resistance is the final hurdle in the roughly $69 billion takeover.