Inflation higher than feared: the specter of inflation is on the horizon


market report

As of: 07/13/2022 18:03

US inflation has scared markets at its highest pace in more than 40 years. True to the motto “it’s over now”, they were able to contain their losses.

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

After the publication of the data at 2.30 pm, the German stock exchange immediately went to the diving station. While the DAX was only slightly in the red before, it then fell by 2.1 percent to 12,633 points. At the end of the trade, the leading German index was able to maintain its negative down to 1.2%.

“Now it is over,” some market participants might have thought, fait accompli. Now most observers expect the US Federal Reserve to raise interest rates by another 0.75 percentage points at its meeting later this month.

“Markets fear that central banks will tighten interest rates too much and thus drive industrialized nations into recession,” concluded Norbert Frey, funds expert at Fürst Fugger Privatbank.

Wall Street reacts moderately

The US stock markets started the day poorly. However, the Dow Jones was able to cut the initial losses somewhat and is now only 0.7 percent lower.

In this situation, a new impulse could most probably come from the second quarter of the reporting season that is already beginning. Tomorrow, the US industry leader JPMorgan and the investment bank Morgan Stanley will open a number of large banks. Markets are already expecting a significant drop in earnings due to rising credit reserves.

Update the economy from 07/13/2022

Klaus-Rainer Jackisch, HR, 7/13/2022 9:47 AM

Discounts on tanks are slowing down inflation in Germany

Inflation also remains high in Germany. According to the Federal Statistical Office, consumer prices rose by 7.6 percent. compared with the same month last year. Wiesbaden authorities confirmed their first estimates this morning. In May, inflation was still 7.9%. The rise in consumer prices in June was halted by a discount on fuel and a EUR 9 ticket introduced at the beginning of the month.

A euro below one dollar for the first time in 20 years

For the first time in 20 years, the euro cost less than the dollar. After the US inflation data, the single European currency fell below parity for a while. Subsequently, the euro recovered slightly. The prospect of a recession due to gas shortage has weighed heavily on the euro in recent weeks.

Glyphosate blues in Bayer

At DAX, Bayer shares have suffered a further setback in glyphosate lawsuits. A US appeals court renews a lawsuit over alleged cancer risk for a weed killer.

Fraport with much more passengers

In June, passenger numbers at Frankfurt Airport reached a new high since the outbreak of the koruna 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 that is important to Fraport continues to recover.

Lufthansa is canceling another 2,000 flights

Lufthansa’s share fell slightly more than MDAX. Due to current service problems, the company is canceling approximately 2,000 more flights. Connections to Frankfurt and Munich are affected by the end of August, a company spokesman said. Last week it was observed that the remaining flight plan could be stabilized with targeted appeals. This has now been analyzed and implemented for the next few weeks. This is the third wave of Lufthansa flight cancellations this summer.

Boeing is supplying more planes

The American aircraft manufacturer Boeing delivered more machines in June than since March 2019. A total of 51 aircraft were handed over to customers last month, the company said yesterday. Among them were 43 Boeing 737 MAX machines, which were taken out of service for almost two years after two accidents in which a total of 346 people were killed.

Gerresheimer passes on the gas price allocation

Gerresheimer’s shares topped the MDAX winners list. The packaging specialist increased sales in the second quarter (end of May) by almost 18 percent year-on-year to EUR 444.6 million. The Düsseldorf-based company benefited from strong demand for special glass, for example for medicine ampoules, plastic packaging and inhalers. However, today this share also benefits from the company’s claims that higher costs as a result of gas price allocation are to be passed on to customers in the form of higher prices.

Dissatisfied shareholders of Auto1

SDAX-based online used car dealer Auto1 sold 166,100 vehicles in the second quarter, up 16.4 percent. more than a year earlier. However, the rate turned negative. In the second quarter, management expects a gross profit in the private (retail) customer area – ie sales minus purchase price – of more than € 980 per vehicle. This would be much more than in the previous quarter.

Twitter brings a lawsuit against Musk

Twitter asks tech billionaire Elon Musk in court to implement agreed website acquisition. As announced, the website has filed a lawsuit in Delaware, CEO Bret Taylor announced yesterday. The competent court may order the take-over to be terminated. Twitter also explicitly demands it in a 60-page lawsuit published by US media. Musk announced Friday that it is pulling out of a contract to buy Twitter for about $ 44 billion.

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