Market report: The specter of inflation is on the horizon


market report

As of: 07/13/2022 6:03 p.m

US inflation has spooked markets at its highest rate in over 40 years. According to the motto “now it’s out”, they were able to contain their losses.

The news from the price front was consistently bad: At 9.1 percent, prices in the US rose even more than feared in June. This is the highest rate of inflation since November 1981. Experts polled by Reuters had expected the eagerly awaited rate of inflation to be 8.8 percent.

After publication of the data at 2.30 p.m., the German stock market promptly went to the dive station. While the DAX had previously only been slightly in the red, it then plummeted by up to 2.1 percent to 12,633 points. At the end of trading, the leading German index was able to contain its minus to 1.2 percent.

“Now it’s out,” some market participants may have thought in view of the fait accompli. Now, most observers expect the US Federal Reserve to hike interest rates by another big 0.75 percentage point at its meeting later this month.

“The markets are worried that the central banks will tighten interest rates too much and thus lead the industrialized countries into recession,” summarizes Norbert Frey, fund expert at Fürst Fugger Privatbank.

Wall Street reacts moderately

The US stock exchanges started the day correspondingly weak. However, the Dow Jones was able to reduce its initial losses somewhat and is currently only 0.7 percent lower.

In this situation, new impetus could most likely come from the reporting season now starting for the second quarter. Tomorrow, the US industry leader JPMorgan and the investment bank Morgan Stanley will open the number of big banks. The markets are already expecting a significant drop in profits due to increasing loan provisions.

Update economy from 07/13/2022

Klaus-Rainer Jackisch, HR, 13.7.2022 09:47 a.m

Tank discount slows inflation in Germany

In Germany, inflation is also remaining at a high level. According to the Federal Statistical Office, consumer prices increased by 7.6 percent compared to the same month last year. The Wiesbaden authorities confirmed their first estimate in the morning. In May, the inflation rate was still 7.9 percent. The increase in consumer prices in June was dampened by the fuel discount introduced at the beginning of the month and the 9-euro ticket.

Euro below one dollar for the first time in 20 years

The euro has cost less than a dollar for the first time in 20 years. After the US inflation data, the European common currency fell below parity for a brief moment. The euro then recovered somewhat. The prospect of a recession as a result of a gas shortage had weighed heavily on the euro in recent weeks.

Glyphosate blues at Bayer

In the DAX, Bayer shares suffered from another setback in the glyphosate lawsuits. A US appeals court is reopening a lawsuit alleging the weed killer’s alleged cancer risks.

Fraport with significantly more passengers

In June, the number of passengers at Frankfurt Airport reached a new high since the outbreak of the corona pandemic. With around five million passengers, the number of passengers at Germany’s largest airport has almost tripled. However, this is around 24 percent below the pre-crisis level of June 2019. International business, which is important for Fraport, is also continuing to recover.

Lufthansa cancels another 2000 flights

The Lufthansa share fell slightly faster than the MDAX. Because of the current handling problems, the company is canceling around 2,000 more flights. Connections from Frankfurt and Munich are affected until the end of August, said a company spokesman. It has been seen in the past week that the remaining flight schedule can be stabilized with targeted cancellations. This has now been analyzed and implemented for the next few weeks. It is already the third wave of Lufthansa flight cancellations this summer.

Boeing is delivering more planes

The US aircraft manufacturer Boeing delivered more machines in June than it has since March 2019. A total of 51 aircraft were handed over to customers last month, the company announced yesterday. Among them were 43 Boeing 737 MAX machines, which had been taken out of service for almost two years after two crashes with a total of 346 deaths.

Gerresheimer passes gas price allocation on

The Gerresheimer share led the list of winners in the MDAX. The packaging specialist increased sales in the second business quarter (until the end of May) by almost 18 percent year-on-year to EUR 444.6 million. The Düsseldorf-based company benefited from good demand for special glass, for example for drug ampoules, plastic packaging and inhalers. However, the share is also benefiting today from company statements that higher costs as a result of a gas price allocation are to be passed on to customers in the form of higher prices.

Auto1 shareholders not satisfied

The online used car dealer Auto1 from the SDAX sold 166,100 vehicles in the second quarter, 16.4 percent more than a year earlier. However, the stock turned negative. For the second quarter, the board of directors expects gross profits in the private customer area (retail) – i.e. sales proceeds minus purchase price – of more than 980 euros per vehicle. That would be significantly more than in the previous quarter.

Twitter files lawsuit against Musk

Twitter is asking tech billionaire Elon Musk in court to implement the agreed takeover of the online service. As announced, the online service filed a lawsuit in the state of Delaware, as Board Chairman Bret Taylor announced yesterday. The competent court can order the completion of a takeover. Twitter also expressly demands this in the 60-page lawsuit published by US media. Musk announced on Friday that he was withdrawing from the agreement to buy Twitter for around $44 billion.

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