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STUTTGART (BOERSE STUTTGART GMBH) – Stuttgart Stock Exchange Report
Directly from the trading floor: the stocks most frequently traded
Inflation data still has a big impact on the stock markets. The DAX lost more than two percent after the release of further US consumer price gains on Wednesday as concerns rose about a key interest rate hike in the US as well as in Europe. Rising interest rates make stocks less attractive than fixed income securities such as bonds. Last week, the leading German index was weighed down by the gas crisis in Europe, the risk of a renewed corona blockade in China and the disappointing economic expectations of the ZEW.
In the past few days, most of the price fixation of all domestic stocks on the Stuttgart Stock Exchange took place for BASF stock. The chemical group presented preliminary quarterly data and increased its sales by 12%. compared to the previous year. Operating profit before special items was EUR 2.34 billion, almost EUR 2.36 billion from the previous year. Both values exceed analysts’ expectations. From the analyst’s point of view, however, the fact that BASF withheld its forecasts for the full year was somewhat disappointing: the German chemical giant only confirmed its full-year forecasts.
Allianz shares were also very much traded in Stuttgart. The largest insurance group in Europe will present its results for the past quarter on August 5. Over the past few days, the title was weighed down by negative comments from analysts, which in the last 3 months lost even around 20 percent. Citigroup analysts downgraded Allianz to hold from buy. At the same time, the target price was lowered quite significantly from around 250 to 190 euros. With a dividend yield of more than 6 percent, the Allianz share is one of the strongest dividend shares on the DAX index.
US stock markets are still influenced by high inflation rates. US consumer prices in June rose 9.1 percent to a new high in 41 years, driven largely by rising gasoline prices. Monthly consumer prices rose 1.3 percent, reaching 1 percent for the third time in four months. Following this rise in inflation, the likelihood of a substantial 1 percentage point hike in interest rates at the next US Federal Reserve meeting in late July has risen significantly to 80 percent. The market-wide S&P 500 index has lost performance recently, but has managed to gain almost 2 percent in the past four weeks.
BYD’s shares have fluctuated significantly over the past few trading days and were traded at high speed on the Stuttgart Stock Exchange. Rumors that Warren Buffett wants to leave the company have not been confirmed. To this end, in recent weeks BYD has focused on electric vehicles. As BYD announced, purely combustion vehicles have not been produced for several weeks. This makes the company, based in the high-tech metropolis of Shenzhen, the first car manufacturer in the world to abandon conventional vehicle production and only produce electric and plug-in hybrid cars.
One of the most wanted actions in Stuttgart was the actions of the corona vaccine producer Biontech. The company has since responded to Curevac’s lawsuit suing Biontech for patent infringement. As Biontech announced, it also reserves the right to take legal action against a Tübingen competitor: “We are exploring all legal options,” the company said. On the other hand, Curevac demands “fair compensation”. Biontech stocks have depreciated in the past few days, but are still rising around 4 percent per week.
The reporting season becomes a stress test
The first half of the year was marked by unusually high losses on the stock exchanges. Driven by rising energy prices and supply chain problems, soaring inflation triggered a 180-degree turn in the economy Monetary policy outside. Along with the dynamic cycle of interest rate increases, fears of a recession and thus falling corporate profits are growing. The market is accordingly concerned about the upcoming US reporting season. In the second quarter, analysts expect S&P 500 companies to increase profits and sales by a good four and ten percent, respectively. The estimate is therefore quite subdued, compared to a 10-year average earnings increase of almost 9 percent. Expectations also vary considerably depending on the industry.
Oil and gas companies in particular are seen by analysts as the winners of the energy commodity price rally and are the central pillar of the reporting season with an estimated 240 percent profit increase. companies should also achieve good business. The market expects larger losses in profits, especially for companies that operate in the consumer areas. Finance houses and the media are also under pressure, according to analysts.
As the future is known to be traded, the focus will be on statements about business prospects. Only a slight decrease in margins is expected in the past quarter. In the meantime, however, consumer sentiment is clearly deteriorating due to rising interest rates. This makes it more and more difficult for companies to pass on the rising costs. Against this background, permanent earnings adjustments appear possible.
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Source: Boerse Stuttgart GmbH, www.boerse-stuttgart.de
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