DAX slips below 14,000 points: profits have melted again

market report

Status: 05/25/2022 12:26 p.m

The dance of the German stock market barometer around the 14,000 mark continues. Even today, investors cannot bring themselves to buy more. Concerns about the economy and inflation are too great.

Initially well above the round one-thousand mark – at midday well below it again: The DAX is currently unable to find a way out of its sideways movement, which has now been going on for several weeks. At noon, the initial price gains are almost gone again. The DAX is trading at around 13,950 points.

bundle of worries

“There is currently simply a lack of impulses that could move the German share index in any direction and thus away from the 14,000 mark,” states Jürgen Molnar, market expert at RoboMarkets. The Ukraine war, high inflation and fears that the global economy will continue to slide are determining the discussion on the financial markets.

Update economy from 25.05.2022

Stefan Wolff, HR, 25.5.2022 · 09:47

Waiting for the Fed

US stock exchanges on Wall Street are also likely to have a hard time maintaining yesterday’s closing level in the afternoon, which is currently being indicated by US futures. In the USA, possible signals from the US Federal Reserve are expected in the evening. Market observers are eagerly awaiting the publication of the minutes from the last meeting of the central bank, which could give an insight into further US monetary policy.

Germany before stagnation

According to the DIW institute in Berlin, the Ukraine war and the pandemic situation in China are slowing down the German economy. “In view of the difficult environment, the German economy is still holding up well. Nevertheless, gross domestic product will probably shrink somewhat temporarily in the second quarter,” said DIW expert Guido Baldi. Only thanks to increasing investments did the economy in Germany grow slightly in the first quarter, despite the Corona crisis and the war. The gross domestic product (GDP) increased by 0.2 percent compared to the previous quarter.

Consumer mood remains in the basement

In view of the Ukraine war and high inflation, Germans’ willingness to spend has continued to be dampened. The barometer of the GfK market researchers in Nuremberg only signals a small increase of 0.6 points to minus 26.0 points. “Thus, the consumer climate has improved slightly, but consumer sentiment is still at an all-time low,” says GfK expert Rolf Bürkl.

Euro under pressure according to ECB statements

The European single currency suffered a significant dampener from statements by the Finnish Council member of the European Central Bank (ECB), Olli Rehn. The euro is now trading at 1.0660, well below the 1.07 mark. Rehn has spoken out in favor of a small interest rate step in the interest rate turnaround expected for July. The deposit rate should be raised by 0.25 percentage points to minus 0.25 percent, according to Rehn. For currency investors, this is apparently not enough to strengthen the euro against the dollar.

Utilities and Airbus in trend

At noon, too, the shares of the utilities RWE and E.ON are among the biggest index winners. Linde and Airbus also gain above average. Losses of around two percent each recorded the shares of SAP and Puma.

Aroundtown increases earnings

Aroundtown shares initially ranked in the MDAX but are now in the red. The real estate group presented figures for the first quarter in the morning. Aroundtown increased its revenues in the quarter from 275 to 394 million euros. Funds from Operations (FFO 1), an important earnings indicator, climbed from EUR 86.6 million to EUR 89 million. Aroundtown is targeting a dividend of 23 to 25 cents per share for the current year.

Profit warning causes Nordex shares to tumble

The negative signs in the Nordex share are getting bigger, they are now losing around 20 percent. Uncertainties about the Ukraine war and ongoing supply chain problems in China have forced the wind turbine manufacturer Nordex to correct its annual targets. In 2022, black numbers can only be achieved in the best case. The company is currently anticipating an operational minus in the current year.

Investors on target for Aareal takeover

The financial investors Advent, Centerbridge and the Canadian state pension fund CPPIB have cleared an important hurdle in the planned takeover bid by Aareal Bank. They collected more than 60 percent of the shares, as announced today. “We are delighted with the successful takeover bid, which will strengthen Aareal Bank’s long-term development and position as a leader in its industry,” said Ranjan Sen, Managing Partner of Advent. The investors had tied the completion of their offer, among other things, to the condition that they collect at least 60 percent of the shares in the money house.

Fuchs Petrolub invests in batteries

The lubricant manufacturer is entering the battery business with a stake. Fuchs Petrolub takes over 28 percent of the shares in E-Lyte Innovations GmbH. The company develops and produces liquid electrolytes, which are used as an essential component of lithium-ion batteries for e-mobility, among other things. Fuchs can acquire additional shares in E-Lyte Innovations. With the purchase, Fuchs is stepping into new territory outside of the classic areas of application for lubricants, according to CEO Stefan Fuchs.

Nike terminates franchise agreement in Russia

First the closure of its own branches, now the US sporting goods manufacturer Nike is ending the contract with the franchise partner Inventive Retail Group (IRG), according to a media report. The “Up And Run” chain of shops has to be closed because Nike no longer supplies goods, the newspaper “Vedomosti” quotes from a letter from IRG to the employees. The franchise contract expires on May 26th. Of the 37 shops in Russia, 28 were still open.

Marks + Spencer sees cost pressure

The British department store chain is warning of poorer prospects for the current financial year due to rising living costs. Given the increasing cost pressure and consumer uncertainty, Marks & Spencer expects lower profits for the 2022/23 financial year. In addition, no repetition of the pandemic-related state corporate tax relief is to be expected. The clothing and food group posted adjusted pre-tax profit of £523m for the year to April 2.