Status: 04/20/2022 16:33
The bullish trend on Wall Street continues for the time being. The Dow Jones posted gains again at the start of trading. This also raises the DAX. However, the Netflix numbers are depressing the mood.
Optimism for the current accounting season has helped US stock markets gain prices today after the previous strong day. In early trading, the leading Dow Jones index rose 0.5 percent to 35,086 points. Shortly after, he continued to expand his plus.
“Investors are taking advantage of the reporting season to increase their exposure to specific sectors,” said Pierre Veyret, an analyst at ActivTrades. At the same time, they closely watched the development of bond yields and eagerly awaited the US Federal Reserve’s economic report in the evening. From the “Beige Book” they hope to draw conclusions about the pace of the expected rate hikes.
Drop in customer numbers surprises Netflix investors
Netflix, on the other hand, weakened sentiment on Wall Street. After a historic drop in customers, the streaming giant’s stock is showing severe losses. The papers lost more than 30 percent of their value at the start of trading in the United States. Pundits are already asking about the end of the streaming boom and have drastically corrected their price targets.
Netflix announced last night after the market closed a fall in the number of users of 200,000 in the first three months of 2022, the first quarterly drop in more than ten years. Netflix was actually expecting 2.5 million new customers. In addition to increasing competitive pressure, the withdrawal from Russia, where Netflix deactivated 700,000 user accounts, had a negative effect.
“Consumers are feeling the pain of inflation and everyone is trying to cut back on unnecessary spending,” said Naeem Aslam, chief market analyst at brokerage firm AvaTrade. In the full-market S&P 500 and the tech-heavy Nasdaq 100, where Netflix shares are listed, development in the first half hour was more subdued. In the wake of Netflix, rivals such as Walt Disney, Warner Bros Discovery and Paramount Global fell as much as 6 percent.
DAX on the rise
After the cautious start to the trading week, the German stock market is clearly positive today, thanks to a tailwind from Wall Street. The DAX gained about 1.25 percent in the afternoon. With more than 14,300 points, the main German index gained a gap to the 14,000 mark.
Courses from food suppliers took a surprising turn on the Frankfurt Stock Exchange. After Lieferando’s parent company Just Eat Takeaway received the gross product volume forecast, industry titles Delivery Hero and Hellofresh also initially lost. However, over the course of the year, Delivery Hero rose to the top of the DAX with a 6.2 percent gain, and Hellofresh gained 1.2 percent.
Price increase for chip stocks
Chip industry stocks also posted price gains on the DAX. Shares of semiconductor company Infineon temporarily rose 3.3 percent. The good news from the industry helps with that. Dutch chip supplier AMSL beat expectations with its sales and profit figures at the start of the year.
ASML had a turnover of 3.5 billion euros in the first quarter and a profit of 695 million euros. ASML continued to report strong orders amid the continuing global shortage of semiconductors. “We are working very, very hard to address all of the supply chain issues that everyone is dealing with,” the company said.
China’s central bank keeps interest rates stable
Despite lockdowns in recent weeks and supply shortages in many sectors, the Chinese economy is not slowing as much as many experts had hoped. Despite clear signs of an economic slowdown due to the corona wave and the Ukraine war, the Chinese central bank surprisingly did not lower its key interest rates.
Update economy as of 04/20/2022
Klaus-Rainer Jackisch, Human Resources, tagesschau24 9:05 am, April 20, 2022
Producer prices fuel inflation concerns
On the other hand, pressure is increasing on the European Central Bank (ECB) to change interest rates soon in the face of the sharp rise in prices. The increase in prices among producers in Germany accelerated further in March. According to the Federal Statistical Office, producer prices increased by 30.9 percent compared to the same month last year. This is a record since the beginning of the survey in 1949. The main reason for the increase in prices is the development of energy. This was 84 percent more expensive in March than a year earlier. According to the Federal Office, the data already reflects the first effects of the war in Ukraine.
High inflation in Germany and the euro zone makes it necessary for the ECB to raise interest rates soon, Bundesbank President Joachim Nagel said in Washington. But he was against precipitous rate hikes. At the beginning of the third quarter, that is, in July, the first increase is to be expected. Then the bond purchases will probably be completed.
Euro above 1.08, oil becomes more expensive again
The euro may hold firm above the 1.08 mark. By early afternoon, the European common currency was trading at $1.0824. Oil prices have recovered somewhat from the previous day’s decline. A barrel (159 liters) of North Sea Brent costs $108.59. That was $1.34 more than Tuesday. Oil prices suffered yesterday on global economic concerns. According to a forecast by the International Monetary Fund, the global economy will grow significantly slower this year due to the war in Ukraine.
P&G is more confident in sales
High demand for cleaning and body care products has made the board of directors of US consumer goods group Procter & Gamble more optimistic about the development of its sales. At the same time, however, he warned of higher raw material and freight costs that would weigh on earnings. The consumer goods giant with brands including Ariel, Oral-B and Pampers now expects sales to rise 4-5% for the full year instead of 3-4% as before. Meanwhile, core earnings per share is expected to be at the lower end of the 3%-6% guidance range.
Lanxess shares in demand on the MDAX
The papers of the chemical company are increasing significantly. Lanxess had a surprisingly good start to the year. In the first quarter, sales should have almost halved compared to the same period last year to a good 2.4 billion euros, according to the company. Earnings before interest, taxes, depreciation and amortization (Ebitda) before special effects increased by almost a third to €320 million. Sales are expected to reach 2,432 million euros, 8.5 percent above average market expectations.
Siemens Energy suffers from wind subsidiary: shares rise
Shares in Siemens Energy and subsidiary Siemens Gamesa more than offset their losses at the start of trading later on. The fact that the energy technology group is revising its annual targets again because of the Spanish wind subsidiary Gamesa has only had a temporary impact on both titles. After a nearly 7 percent loss in early trading, Siemens Energy shares tested positive by midday. Gamesa share certificates fell a good five percent at the open in Madrid, then turned positive and more recently rose five percent.
In the third quarter of the current fiscal year, Siemens Energy’s sales fell 1.7 percent to 6.58 billion euros, as the company announced. Adjusted operating profit (EBIT) before special items was minus €21 million. The corresponding margin slipped from plus 4.4 to minus 0.3 percent. Incoming orders fell by 27.5 percent to almost eight billion euros.
Danone shares soar
The papers of the French food company increase up to eight percent. Danone posted a significant increase in sales in the first quarter and maintains its full-year forecast despite the economic fallout from the Ukraine war. The yogurt maker’s revenue rose 7.1 percent to 6.2 billion euros in the first quarter, more than analysts had expected. Danone was able to drive higher prices in the quarter. By 2022, the French group now expects an operating margin of more than twelve percent.
Credit Suisse posts losses
After losing billions in 2021, the leading Swiss bank also started in the red in 2022. New provisions for old litigation, the war in Ukraine and the impairment of a holding are likely to lead to losses in the first quarter, Credit Suisse said in the morning. The biggest burden comes from litigation going back more than a decade. To do this, the bank is increasing its provisions by about 600 million Swiss francs. Overall, provisions for legal cases in the first quarter are likely to amount to around CHF700 million.
BMW plans a big jump
BMW will launch its new luxury sedan in November, for the first time also in a fully electric version like the i7. “The fully electric i7 will play a very important role in China,” sales director Pieter Nota said at the vehicles’ presentation in Munich. He also expects a high share of the E variant in sales on the west and east coast of the US and in parts of Europe. The top model has a range of up to 625 kilometers.
The starting price of the i7 is 135,900 euros, with a diesel engine the car is available from 107,300 euros. “The return expectations for the 7th are very good,” Nota said. The vehicles are manufactured exclusively at the Dingolfing plant in Lower Bavaria. Nota did not want to give a forecast on the expected share of sales of the propulsion variants: gasoline, diesel, plug-in hybrid and electric battery.