market report
Status: 01.09.2023 10:18 p.m
Although US jobs data suggests the Federal Reserve may pause interest rates, investors were not tempted to buy. At the end of the week, the New York stock exchanges are largely stationary.
The recent cooling of the American labor market in August is fueling expectations of an interest rate pause by the US Federal Reserve (Fed). However, the new figures did not provide any particular impetus on Wall Street. The Dow Jones index of blue chips closed 0.33 percent higher, while the broader S&P 500 closed up 0.18 percent. The tech-heavy Nasdaq 100 was treading water. For the past week, the Dow posted a price increase of 1.4 percent.
Unemployment up in the US
Market traders turned their attention to the US job market figures for August released today. The data plays an important role in monetary policy, as a strong job market with significant wage increases can keep inflation high.
Analysts pointed out that the data was mixed. The US economy created slightly more jobs than expected in August. However, the increase in employment was revised downwards massively in the two previous months. In addition, the unemployment rate rose significantly – experts had expected stagnation. The increase in hourly wages weakened somewhat more than forecast.
HQ Trust chief economist Michael Heise sees the weakening of the labor market as a signal that the Federal Reserve is taking a pause on interest rates. “The new data supports a rate hike by the Fed in the upcoming meeting and probably also in the October/November meeting.” However, the Fed will not completely rule out further rate hikes in this cycle because of a monthly publication. “Some uncertainty about the development of key interest rates remains.”
Weak start to September for the DAX
At the end of the trading week, the DAX fell again significantly by the close of trading. The leading German index closed 0.67 percent lower at 15,840 points and is thus moving further away from the 16,000 point mark, which it briefly exceeded yesterday. The index was slowed down primarily by the price losses of German car shares. Despite today’s discount, the German stock market barometer was still able to record a weekly plus of 1.3 percent.
IMF expects longer high-interest phase
The International Monetary Fund (IMF) is preparing for a prolonged phase of high interest rates. The key monetary policy rates are likely to remain high globally for “some time”, said IMF Vice President Gita Gopinath at a conference of the South African central bank. They will probably never fall to a low level for a longer period of time, as was the case in many currency areas in the past decade.
Auto industry under pressure
Further price cuts by Tesla in China and a negative analyst assessment of Volkswagen and Renault are affecting the European car sector. The US e-vehicle manufacturer Tesla reduced the prices for the premium models S and X in China by almost a fifth, putting further pressure on the competition from Europe. He also launched what he says was a “refreshed” version of his Model 3 – with a longer range than the previous model.
In the German market, Volkswagen’s preferred shares, which were also impacted by a sell recommendation from the Swiss bank UBS, fell significantly. In Paris, Renault slipped, and here, too, UBS had put its thumb down on “Sell”. According to UBS analyst Patrick Hummel, the headwind that Volkswagen is also facing in Europe from Chinese electric cars is underestimated on the market. On a global level, the Wolfsburg-based carmaker is being put under the greatest pressure by increasing Chinese competition. In the DAX, the stocks from Volkswagen, BMW and Mercedes were among the biggest losers.
High damage due to metal fraud at Aurubis
The Hamburg-based copper manufacturer Aurubis has issued a profit warning due to abnormalities in its metal inventories. “During the regular inspection of the metal stock, Aurubis found significant deviations from the target stock as well as deviations from special samples of certain deliveries of input materials in the recycling area,” the MDAX group announced. On the basis of these indications, it is assumed that he has become the subject of criminal activity. The extent of the damage is still unclear, an extraordinary inventory is running. The State Criminal Police Office was involved.
Salzgitter withdraws forecast
After new problems at its stake in Aurubis became known, the Salzgitter steel group also withdrew its earnings forecast for the current year. So far, the management around CEO Gunnar Groebler had promised a significant decline in pre-tax earnings to 300 to 400 million euros for 2023 due to falling steel prices and lower demand. Salzgitter has a stake of almost 30 percent in the Hamburg copper manufacturer Aurubis.
Fielmann raises forecast
The Fielmann optician chain has raised its forecast after the latest acquisitions. External sales should be around 2.3 billion euros in 2023 and thus 13 percent above the previous year. So far, an increase of seven to ten percent had been promised. Group sales should increase to the same extent to around two billion euros. In terms of the operating result (EBITDA), Fielmann expects an increase of 18 percent to around 400 million euros. An increase of nine to 21 percent had previously been forecast. Earnings before taxes (EBT) will climb to over EUR 190 million, which also corresponds to growth of 18 percent.
Chinese corporations apply for AI approval
More than 100 Chinese companies have applied to the government in Beijing for approval of AI software for computer-generated images and videos. Huawei and Alibaba are among the companies that have applied for a license for the commercial use of specialized artificial intelligence (AI). These programs can create images and videos based on just a few commands or falsify existing material in a deceptively real way. The latter can be used as a so-called “deep fake” for disinformation campaigns. Chinese companies must undergo a government security assessment before they are allowed to make so-called generative AI, which also includes programs like ChatGPT, available to the public.
Shell sells electricity customer business in Germany
The energy group Shell is selling its household customer business in Germany and Great Britain to the British competitor Octopus Energy. The tariffs and the offer remained unaffected, Shell said today. The transaction is expected to close in the fourth quarter of this year. Shell supplies around two million household customers in the two countries together with gas, electricity and broadband services. According to the group, the two companies also want to explore opportunities for international cooperation in the field of charging electric vehicles.
Weapons manufacturer Heckler & Koch earns less
Germany’s largest handgun maker, Heckler & Koch, saw its stores down slightly. In the first half of the year, sales amounted to EUR 149.9 million, which corresponds to a decrease of four percent compared to the same period last year. The operating result fell by 22 percent to 26 million euros. CFO Björn Krönert justified the development with currency effects and a weaker US civil market. In addition, costs have increased. Net profit developed positively, rising by 1.6 million to 17.6 million euros. This was due to tax effects and a significantly lower interest burden.
Novo Nordisk Europe’s most valuable company
Danish drugmaker Novo Nordisk today ousted LVMH as Europe’s most valuable listed company, ending the French luxury group’s two-and-a-half-year reign at the top. French group LVMH, which owns brands such as Dior, Louis Vuitton and Rimowa, is currently suffering from growing concerns about the prospects for the Chinese economy. By contrast, Novo Nordisk is benefiting from a surge in demand for its high-potency diabetes and weight-loss drugs Ozempic and Wegovy, which has propelled its earnings and shares to record highs. Thanks to a price increase of 2.1 percent, the market capitalization of Novo Nordisk rose to the equivalent of a good 393 billion euros. LVMH was valued at 389.5 billion euros after a price decline of 0.8 percent.
Amgen approves billion-euro acquisition of Horizon
The American antitrust authority FTC has approved the multi-billion takeover of the biotechnology company Horizon Therapeutics by the pharmaceutical company Amgen. In May, the FTC filed a lawsuit to stop the takeover. After Amgen made concessions, the FTC has dropped concerns about the $27.8 billion purchase. According to the two US companies, the acquisition should be completed at the beginning of the fourth quarter.
Aramco apparently wants to sell its $50 billion stake
Saudi Arabian oil giant Saudi Aramco plans to sell a $50 billion stake, according to a report. The Wall Street Journal reported today. The intention is said to have existed last year, but was not pursued due to unfavorable market conditions. The planned project could be implemented this year – according to the report via the Riyadh stock exchange.
Kühne doubles Brenntag stake
Billionaire Klaus-Michael Kühne has increased his stake in chemicals retailer Brenntag. He now has a good 10 percent of the voting rights through his holding company, according to a statement by the DAX group on the evening after the stock exchange closed. Previously, his share was just under 5.2 percent. Brenntag’s management is under pressure from activist investors who favor splitting up the group.
Meta is reportedly considering ad-free subscriptions in Europe
According to a report, the Facebook group Meta is considering introducing paid subscription versions of Facebook and Instagram without ads in Europe. At the same time, it will continue to be possible to use these services free of charge with advertising, according to the “New York Times”, citing informed people. Meta declined to comment on the report. With the paid subscription, Meta would react to the changed data protection situation in Europe. Previously, Meta had rejected paid subscriptions on the grounds that its services should be available to everyone.
Dispute between Disney and Charter also weighs on other titles
A dispute over the distribution agreement between the American cable network operator Charter Communications and the entertainment group Walt Disney led to price losses for both companies. Disney has pulled TV channels like ESPN and ABC from Charter’s “Spectrum” cable service. A message from Charter popped up on screen, urging viewers to reach out to Disney. “We made Disney a fair offer, but they are asking for an excessive price increase,” it said. Shares in other streaming companies such as Warner Bros Discovery, Paramount Global and Fox also lost up to ten percent.
