Among other things, German consumer prices, which were not as strong as expected by economists, provided relief on the markets on Thursday. The inflation rate in Germany rose by 8.7 percent in January compared to the same month last year, as the Federal Statistical Office announced in the morning based on a preliminary estimate. This means that inflation has increased slightly compared to December, when the inflation rate was 8.6 percent.
“Despite the rebound from the energy price brake, the inflation rate has hardly increased. That’s a good sign, as it shows that inflation has peaked,” says Alexander Krüger, chief economist at Hauck Aufhäuser Lampe. In his opinion, the energy prices speak for further and significant declines in the inflation rate.
Thomas Gitzel, chief economist at VP Bank, assumes that inflation rates will continue to fall in the coming months. “Energy price base effects will have a particularly strong impact from March onwards and will push down inflation rates,” he says.
The German inflation figures this month have an additional explosiveness: because they could not be published on Tuesday of last week due to a technical problem, the data were not included in the inflation figures for the euro area published on Wednesday. Including the German data, this rate could now be higher than before.
New figures on the US labor market could also provide movement in the afternoon. The US Department of Labor announces how many people have recently filed for initial unemployment benefits. The figures are important for the markets primarily because they are considered an important criterion for monetary policy: the more stable the labor market, the more likely it is that interest rates will rise.
The weekly initial jobless claims were recently at a low level of less than 200,000. “There are not yet any signs that the situation on the labor market is easing,” write the analysts at Helaba. “However, should the number rise unexpectedly and significantly, market participants could quickly speculate that the end of the rate hike cycle is near.”
Concerns about interest rates rising further spread on Wall Street on Wednesday. The Dow Jones index of standard values closed 0.6 percent lower at 33,949 points. The tech-heavy Nasdaq fell 1.7 percent to 11,910 points. The broad S&P 500 lost 1.1 percent to 4117 points.
Meanwhile, positive guidelines are coming from Asia: Investors are apparently hoping for an easing of the relationship between the USA and China. The Shanghai Composite Index rose 1.1 percent on Thursday, while Hong Kong’s Hang Seng gained 1.5 percent. On the other hand, the losses on Wall Street caused restraint on Japan’s stock exchanges: Tokyo’s leading index Nikkei was 0.1 percent weaker at 27,584 points, the broader Topix index was 0.1 percent higher.
Company balance sheets at a glance
Investors in Germany also look at some company balance sheets on Thursday. The numerous strong quarterly reports support the Dax. The delivery service Delivery Hero, the fertilizer and salt manufacturer K+S and the seed manufacturer KWS already presented their figures in the morning (see below). Siemens and Deutsche Börse opened their books on Wednesday evening after the stock market closed.
Siemens increased its group sales in the first quarter by ten percent to almost 18.1 billion euros, the result of the industrial businesses increased by nine percent. However, after-tax profit was around 1.6 billion euros, and incoming orders also fell by seven percent.
Siemens is now increasing its forecast for the new fiscal year: The Dax group expects sales growth of seven to ten percent for the 2022/2023 fiscal year. The analysts at Raiffeisen Research summarized that the Munich-based company reported a strong increase in sales with a high level of incoming orders. The stock gains 6.7 percent.
Deutsche Börse was also able to report positive figures on Wednesday evening. The profit attributable to the shareholders rose by 24 percent to 1.49 billion euros last year, the stock exchange operator said. Net sales also increased by 24 percent to 4.33 billion euros. “We have fully exploited the strengths of our diversified business model,” explained stock exchange boss Theodor Weimer.
Deutsche Börse intends to pay its shareholders a higher dividend of EUR 3.60 per share for the past year. The paper rose 1.6 percent in the morning.
Look at the euro and oil
The euro also benefited from a weak dollar in the morning and rose slightly. The shared currency traded at $1.0738, slightly higher than the previous day. The European Central Bank (ECB) last set the reference rate at $1.0735 (Tuesday: $1.0700) on Wednesday afternoon.
In addition to the weakness of the dollar, the euro exchange rate is supported by monetary policy: the ECB representatives had recently spoken out in favor of further interest rate hikes in the fight against inflation. Commerzbank analyst Esther Reichelt sees a hard lower limit at $1.07. “However, as long as the inflation rate continues to trend downwards, the arguments for a weaker dollar again in the medium term remain,” she writes.
Oil prices also rose, but did not continue their strong rise since the beginning of the trading week. A barrel (159 liters) of North Sea Brent for delivery in April recently cost 85.23 US dollars, 14 cents more than the day before. The price for a barrel of the American West Texas Intermediate (WTI) variety for March delivery also rose slightly by ten cents to $78.57.
US oil reserves rose further last week by 2.4 million barrels to 455.1 million barrels, it was announced on Wednesday. Analysts assume that this has slowed the rise in oil prices. Rising US oil reserves usually weigh on oil prices.
Look at the chart technique
On the downside, the area just above 15,220 points offers short-term support. In the medium term, investors should keep an eye on the range between 15,000 and 14,800 points: this area has always been highly competitive in recent years and, for example, offered nine months of support in 2021.
Look at the individual values
Bayer: On Wednesday, shortly before the close of trading, Bayer announced that Werner Baumann was stepping down as CEO. Baumann had recently come under increasing criticism. The papers lose 0.7 percent after gains the previous day.
Delivery Hero: The food delivery service performed worse than expected in the final quarter of 2022. Sales adjusted for voucher costs (segment sales) rose by around one fifth to EUR 2.5 billion in the fourth quarter compared to the same period of the previous year. The group thus missed the expectations of industry experts. But CEO Niklas Östberg wants to make Delivery Hero operationally profitable in the current year. The manager continues to target a full-year operating margin of 0.5 percent, with profitability likely to more than double in the second half. Delivery Hero shares tumbled 7.8 percent.
K+S: The shares of K + S in the MDax lose 0.1 percent after initial price gains. Analysts at Citigroup have upgraded the fertilizer and salt maker’s shares to neutral from sell. They raised the price target from 21 to 22 euros. The papers went out of business on Wednesday at EUR 21.59.
KWS seed: After good business in the first half of the year, the seed manufacturer KWS has increased its sales forecast. In the first six months of the 2022/23 financial year, sales increased by 31 percent to 563.7 million euros, as the company announced on Thursday. According to schedule, the operating result (Ebitda) is negative, with a minus of 24.5 million euros after minus 45.2 million euros in the previous year. KWS now expects revenue growth of 13 to 15 percent for the current 2022/23 fiscal year. The papers add 3.6 percent.
Talanx: The insurance group slightly exceeded its own profit target in 2022 despite high catastrophe losses. At a good 1.17 billion euros, the surplus was slightly above the target range of 1.05 to 1.15 billion. For 2022, shareholders will receive a 25 percent higher dividend of two euros per share. The paper gains one percent.
verb: Verbio jump by five percent and thus take the lead in the MDax. This makes them the undisputed winners in the MDax. According to the analysts at Hauck Aufhäuser, the decline in operating profits for the biofuel supplier was milder in the second quarter than feared. The margins should recover again, and the confirmed forecast for the year also suggests a better second half of the year.
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