Market Report: Risk appetite is increasing

Market Report: Risk appetite is increasing
Written by insideindyhomes

market report

Status: 05/18/2022 09:56 a.m

The DAX started trading just slightly above the previous day’s level. However, the mark of 14,000 points remains at a distance. Investors appear to be attempting a turnaround in the stock market.

With currently almost 14,200 points, the DAX in early trading is not yet clearly above its previous day’s level. However, the one-thousand mark, which has been hard fought over in recent weeks, seems to be kept at a distance. For experts, this is a sign of a possible longer-term recovery.

In a recent commentary, analysts at Commerzbank write of investors’ “risk appetite” returning in view of the strong US stock markets yesterday. Drivers are good economic data such as robust US retail sales from the previous day. Experts at Dutch bank ING believe that strong economic data has also given the central banks more room to maneuver to tighten monetary policy. High consumer prices remained the big problem.

Wall Street strong, Asia mixed

The specifications, especially from the USA, encourage investors in the middle of the week. Good business figures from some large corporations caused prices to rise across the board. The standard value index Dow Jones closed 1.3 percent higher at 32,654 points. The technology-heavy Nasdaq even gained 2.8 percent to 11,984 points.

Japan’s economy is shrinking less than feared

In Asia, the stock markets in the Far East are showing a mixed picture in the morning. The Shanghai stock exchange was down 0.5 percent. The index of the most important companies in Shanghai and Shenzhen lost 0.8 percent. The Japanese Nikkei index, on the other hand, closed 0.9 percent higher at 26,911 points. The Tokyo stock exchange also benefited from better than expected economic data. The Japanese economy contracted more slowly than expected in the first quarter. The gross domestic product (GDP) fell by 0.2 percent in the period, but the market forecasts had assumed an average minus of 0.4 percent.

Oil prices are rising again

Oil prices were modestly higher in early trade on Wednesday. In the morning, a barrel (159 liters) of North Sea Brent costs 112.70 US dollars, an increase of 0.5 percent. The prospect of a somewhat relaxed corona policy in China continues to provide a boost on the oil market. However, prices are also supported by new inventory data from the USA. The American Petroleum Institute (API) reported a significant decline in national oil stocks the night before. A troy ounce of gold this morning is $1,809, slightly less than yesterday.

Euro stays above 1.05

On the foreign exchange market, the euro is able to hold its ground above the $1.05 mark it reached yesterday. The European common currency is currently trading at $1.0533. The euro has recently been boosted by rising interest rate expectations. According to a recent survey, experts expect the European Central Bank (ECB) to raise interest rates by a total of one percentage point this year.

E.ON and Daimler Truck ahead in the DAX

With overall low price fluctuations, the shares of the truck manufacturer Daimler Truck are listed at the top of the DAX. Yesterday, the company presented good figures and an optimistic outlook for the current year as a whole. Stocks from E.ON and Deutsche Bank are also clearly up.

Auto stocks slowed

Titles from VW, BMW and Mercedes-Benz are in the middle of the DAX. Car sales in the EU left a lot to be desired in April. Delivery problems slowed down the new car market significantly. Last month, 20.6 percent fewer new registrations were recorded in the European Union than in the same month last year, according to the manufacturer association Acea. With the exception of the first pandemic year, 2020, this was the weakest April since records began in 1990. A total of 684,000 new vehicles were sold.

Siemens Energy wants its wind subsidiary entirely

The energy technology group wants to take over its Spanish problem subsidiary Siemens Gamesa completely. Siemens Energy has now confirmed a report by the Bloomberg news agency. Siemens Gamesa shares increase more than ten percent in the morning. The project is intended to acquire the remaining shares in the wind power company not yet owned by the company. The takeover is to be paid for in full in cash. In a further step, Siemens Gamesa could then be taken off the stock exchange, according to Siemens Energy. Siemens Energy already owns a good two-thirds of Gamesa’s shares.

TUI pays back further state aid

The travel group has raised 425 million euros in fresh capital for the repayment of state aid from the Corona crisis. With the fresh money and available cash, TUI wants to repay one of the two silent participations of the state Corona Aid Fund WSF with a volume of 671 million euros, according to a company announcement from yesterday evening. The state had saved TUI from the end with a total of 4.3 billion euros in financial aid in the Corona crisis.

Dermapharm benefits from vaccine production

The drug manufacturer increased its operating result (Ebitda) by almost 18 percent to 75.1 million euros. Despite the Ukraine war and the lockdowns in China, the “permanent ability to deliver” was maintained. Sales increased by around nine percent to EUR 231.6 million. Good sales of painkillers, anti-inflammatory drugs and allergy preparations, but also the production of vaccines for BioNTech, ensured the increases.

RWE with third green bond

The utility has issued another green bond with a total volume of two billion euros. The bond was issued in two tranches of one billion euros each with maturities until 2026 and 2030, according to RWE. For the first tranche, the yield to maturity is 2.2 percent. For the second tranche, the return to maturity is 2.9 percent. The issue met with strong interest among investors. RWE had already issued two green bonds with a total volume of 1.85 billion euros last year.

Netflix needs to downsize

Growth at the US video streaming provider is stuttering. Netflix has announced the layoff of 150 employees, most of them in the US. This corresponds to about two percent of the employees in the home market. Netflix had recently seen its subscriber base drop for the first time in a decade. The world’s largest streaming provider cited the war in Ukraine, inflation and fierce competition as justification.

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