Frankfurt The Dax continued to recover on Friday. The leading German index closed around 1.6 percent up at 15,578 points. The Dax received a boost primarily from the VW share, which at times rose by more than ten percent. A significant increase in deliveries is expected for 2023, according to the VW headquarters in Wolfsburg on Friday afternoon.
The Asian stock exchanges had also recorded price gains. Deutsche Bank’s market strategists attributed the good sentiment there to the Caixin PMI for China’s service sector. This was better than expected in February. This news also had a positive impact on the European stock markets.
There were also positive reports on the economy on Friday. German exporters got off to a surprisingly good start to the year, also thanks to strong demand from their most important customer, the USA. Their exports grew in January by 2.1 percent compared to the previous month to 130.6 billion euros, as the Federal Statistical Office announced on Friday.
Economists polled by the Reuters news agency had only expected growth of 1.5 percent after a 6.3 percent slump in December.
Investors on Wall Street shook off fears of rising interest rates at the end of the week. The Dow Jones index of standard values was 0.2 percent higher at 33,085 points in early trading. The broader S&P 500 rose 0.6 percent to 4004 points. The Nasdaq technology exchange index rose 0.9 percent to 11,560 points.
The chairman of the Atlanta branch of the Fed said he favors a slow and steady stance from the US Federal Reserve with hikes of 25 basis points as the impact of higher interest rates may not be felt until spring. As a result, US 10-year Treasury yields eased from a four-month high. In addition, robust company balance sheets supported prices on the overall market.
Measures taken by the ECB: Further rate hikes in sight
The next meeting of the European Central Bank (ECB) in two weeks is likely to be dominated by the hawks again, as inflation numbers surprised in almost all major euro-zone countries. Hawks are central bankers who are more inclined towards tighter monetary policy with higher interest rates.
For the stock markets, Janus Henderson Investors believes that persistent inflation and the lack of a change in course by central banks will continue to mean that value stocks will outperform higher-rated growth stocks – and as a result, Europe, as a much cheaper “value” market, should also do better than the US – Stock market perform.
Ultimately, given the usual delays of up to a year, the significant monetary tightening will have a significant impact on the economy. This will then be the moment when stocks can no longer expect a reversal but a pause from the central bank. This could then be a good entry signal.
Government bond prices were firmer on Friday. Prices rose, while yields fell. The ten-year bonds returned 2.705 percent after 2.754 percent on Thursday.
Cryptocurrency Bitcoin under pressure
In the wake of a Bitcoin price slide, stocks from the crypto sector are falling significantly. The main cybercurrency fell 4.6 percent to around $22,345, its lowest level since mid-February. The papers of the crypto exchange Coinbase dive by 2.9 percent, blockchain operator Bitfarms by 3.1 percent.
Investors are currently worried about the future of the crypto bank Silvergate. Meanwhile, Silvergate’s shares have slipped by almost 12 percent to a record low of $5.03.
Look at the individual values
Rheinmetall: In February, Rheinmetall was defeated by Commerzbank when it came to entering the Dax – but now the armaments group is about to be included in the leading index of the 40 most important listed companies. Deutsche Börse’s decision will be made on Friday evening around 10 p.m., but Rheinmetall is clearly ahead in the relevant February rankings. The stock climbed 0.9 percent.
Lufthansa flies a profit … Lufthansa also has a chance of returning to the Dax. After the massive losses during the corona pandemic last year, the group has made a profit again. Adjusted operating profit was 1.5 billion euros after a deficit of 1.7 billion euros a year earlier, the airline announced on Friday. The strong demand for flights from travelers and in air freight brought the airline 2022 almost twice as much revenue as in the previous year at 32.8 billion euros. Lufthansa boss Carsten Spohr has announced rising ticket prices for the current year. The company expects strong global demand with limited supply. The stock gained more than 6 percent.
…but pays no dividend: Despite the annual profit, the shareholders should not receive a dividend for 2022, as can be seen from the annual report of the crane airline. In addition, the Executive Board wants to have liquidity of eight to ten billion euros in order to better protect Lufthansa against crises. “Only a strong balance sheet gives us the necessary resilience to invest in the future of our company and to overcome future crises,” said CFO Remco Steenbergen.
Infineon: The company is in focus after an acquisition. The chip group Infineon is expanding its business with innovative power semiconductors for electrical applications with a takeover. The Canadian manufacturer GaN Systems is going to the Munich manufacturer for 830 million US dollars, Infineon announced on Thursday. The stock was up 1.9 percent in the afternoon.
Volkswagen: The Wolfsburg company increased its net profit by around three percent to 15.8 billion euros last year. From this, the shareholders are to receive a dividend increased by EUR 1.20 each. Instead of EUR 7.50 per common and EUR 7.56 per preferred share as in the previous year, EUR 8.70 and EUR 8.76 respectively are to flow to the shareholders. The preferred share was up 10.6 percent in the afternoon.
ericsson The determination of an expected fine in the US supported the shares of the Swedish telecom equipment maker Ericsson. The papers rose by four percent to 60.10 crowns. The company is to pay $206 million to the US Department of Justice. That roughly corresponds to the amount that Ericsson had put aside for the fine. Analysts had expected a higher amount.
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