Expected slightly higher DAX: Investors are waiting for the US Federal Reserve

market report

Status: 07/27/2022 07:29

The swing move just above 13,000 points on the DAX should initially continue today. Before the next expected interest rate hike in the US in the evening there is no mood for purchases on the stock exchange.

The German stock market barometer is expected to start hitting 13,170 points, about half a percent higher than yesterday’s closing level. Investors remain restrained against another rate hike by the US Federal Reserve (Fed).

How big will the rate hike be?

The Fed will most likely continue to fight high inflation this evening. After the sharp increase in interest rates in June, a further increase of 0.75 percentage points is expected. The main interest rate would then be between 2.25 and 2.5 percent, after it was on the zero line a few months ago. An even larger increase by a whole percentage point seems possible.

Wall Street under pressure

In the morning, Wall Street specifications are rather unfavorable. Earnings warning from the retail group Walmart triggered a bad mood in the US stock markets. A potential obstacle to the US economy caused by a slowdown in consumer spending prompted sales. The US Dow Jones standard value index closed 0.7 percent lower to 31,761 points. The tech-savvy Nasdaq was down 1.9 percent to 11,562 points. The broad S&P 500 index lost 1.2 percent. up to 3921 points.

Alphabet and Microsoft with numbers

However, good quarterly data from US companies brought some relief after the close of the US stock market. Google’s parent company, Alphabet, posted sales growth of 16 percent to nearly $ 69.7 billion in the second quarter, the US tech group announced Tuesday night. Thus, Alphabet almost met the expectations of analysts.

Lower demand for computers around the world made it harder for the Microsoft group to run Windows, as did shrinking advertising budgets and a stronger dollar. However, Microsoft also significantly increased its revenues by twelve percent to $ 51.9 billion. Microsoft grossed $ 16.7 billion, two percent more than in the same period last year.

Asian exchanges undecided

Investors also prefer to take a break in the Asian stock markets. The Japanese Nikkei index was down 0.1 percent. higher and amounted to 27,693 points. The Shanghai Stock Exchange fell 0.1 percent. The index of major companies in Shanghai and Shenzhen lost 0.4 percent.

The euro returns to parity

In the foreign exchange market, investors are waiting for a decision on US interest rates. The euro is once again approaching parity with the US dollar. In the morning the single European currency costs USD 1.0148.

Oil remains high

Oil prices do not change much in the morning. A North Sea Brent barrel currently costs $ 104.45. Prices rose again yesterday due to Russia’s announcement that from today it will again limit natural gas supplies via the Nord Stream 1 gas pipeline to the Baltic Sea. The morning gold ounce is still $ 1,715.

Adidas is suffering from Chinese business

A series of quarterly data and prospects for German and international companies keep investors busy in the morning. Sporting goods manufacturer Adidas already lowered its forecasts for the current financial year yesterday evening. Crown restrictions in China affect the company more than expected. Instead of a sales increase of around eleven percent, expect only five percent to nine percent in 2022. Profit from continuing operations of around € 1.3 billion is expected to be a good quarter lower than previously planned.

Deutsche Börse earns more

On the other hand, Deutsche Börse is gaining a bit more optimism after good results in the second quarter. The group now expects net sales for the current year to be “significantly” higher than its original plan of € 3.8 billion, the company announced yesterday after the stock market close. In the second quarter, net sales rose 15 percent to 1.02 billion euros. All in all, the profit was around EUR 341 million, ten percent more than a year ago.

Qiagen raises the prognosis

The Qiagen diagnostic group is also more confident after the first half of 2022. DAX now expects sales of at least $ 2.2 billion and adjusted diluted earnings of at least $ 2.30 per share. Group sales fell nine percent in the second quarter, compared to the prior-year quarter, to $ 516 million. Adjusted earnings fell to $ 0.51 per share from $ 0.67 per share.

Lufthansa is on strike

Through a ground workers’ warning strike, the Ver.di union wants to increase the pressure on the ongoing wage negotiations with Lufthansa. The strike, which is expected to last until 6 a.m. tomorrow, is hitting passengers hard: Lufthansa has canceled more than 1,000 flights at its hubs in Frankfurt and Munich, and fears the consequences until Friday, the last day of school before vacations in Bavaria. 134,000 passengers had to change or abandon their travel plans.

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