Before US Interest Rate Decision: Are Investors Giving Up Courage?

market report

Status: 06/15/2022 09:36

At the start of trading on the day of the US interest rate decision, the DAX was up nearly one percent. After the losses of the last few trading days, investors are hoping for new opportunities. But the tension remains high.

The German stock exchange barometer started trading at 13,430 points in the middle of the week. This corresponds to a price increase of almost one percent. Apparently, some bargain hunters are recovering given the recent price drop.

day of the fed

However, trading is likely to be under the spell of the expected interest rate decision by the US Federal Reserve (Fed) until the evening. The decision of the monetary authorities will be announced at 20:00 Central European time. As US inflation surprisingly rose again in May, investors now expect interest rates to rise by 0.75 percentage points instead of the reported 0.5 percentage points. However, according to Neil Wilson, an analyst at online broker, the Fed will stay on course and report further hikes of half a percentage point each through the fall.

Special meeting of the ECB

The European Central Bank (ECB) will hold an extraordinary board meeting today to discuss the fallout from the recent bond market sell-off. “The Governing Council will hold an ad hoc meeting on Wednesday to discuss current market conditions,” a spokesperson said. No further details were provided. On Thursday, the ECB announced a series of interest rate hikes, which pushed yields higher in southern European bonds in particular.

Unclear specifications from abroad

The Wall Street indices were mostly down last night. The US standard value index Dow Jones closed down 0.5% at 30,364 points. The broad S&P 500 lost 0.4% to 3735 points. However, the high-tech Nasdaq rose 0.2% to 10,828 points.

The Far Eastern markets in the morning also did not offer a clear picture. The Japanese Nikkei index closed down 1.1% at 26,326 points. The Shanghai Stock Exchange rose 1%.

The Chinese economy is showing signs of recovery

A series of economic data from China fuel hopes of a recovery in the world’s second largest economy. According to the statistical office, industrial production in May was 0.7 percent higher than in the same month last year. In the previous month, production had decreased significantly by 2.9%. Although retail sales fell 6.7% in May, analysts’ estimates fell 7.1%.

Euros to 1.04 dollars

The euro appears to be stabilizing above the $ 1.04 mark in view of the upcoming rate hike in the US. The common European currency is currently trading at $ 1.0475. Oil prices rise slightly in the morning. They are getting a boost from positive economic data from China. China is one of the largest oil consumers in the world.

Conti and Adidas in front

In the DAX, shares of Continental, Adidas and Airbus can set the scene with price gains of more than two percent each. Bayer and Fresenius are at the bottom of the list, albeit with small losses.

Hearing on slave labor at the VW branch

A hearing began in the Brazilian capital, Brasilia, about possible slave labor on an Amazon farm owned by a subsidiary of Volkswagen do Brasil in the 1970s and 1980s. This was confirmed by the prosecutor in charge Rafael Garcia Rodrigues of the news agency dpa. It should also cover any compensation for the farm workers and for the Brazilian company.

Morphosys actions required

Documents from the biotech group earn about five percent. Morphosys concludes a licensing agreement for the renal drug felzartamab and MOR210 cancer therapy with the US company Human Immunology Biosciences (HIBio). In addition to an upfront payment of $ 15 million for MOR210 upon signing the contract, Bavarians are entitled to future payments of up to $ 1 billion for both programs.

BP focuses on renewable energies

British oil company BP is investing in one of the world’s largest renewable energy projects in Australia. The company said it will take a 40.5% stake in Asia’s $ 36 billion renewable energy hub and manage the solar and wind plants, which will cover an area of ​​6,500 square kilometers. The overall project foresees a capacity of 26 gigawatts. In addition, 1.6 million tons of green hydrogen will be produced there every year.

Acquisition fantasy in Gerresheimer

A Bloomberg news agency report on an offer turned down by financial investor Bain is upping Gerresheimer’s stock in the morning and sparking new takeover speculation for the packaging specialist. Already last night after the close of trading, the stock gained more than ten percent. So far, newspapers had lost about a quarter of their value this year.

Apple secures football streaming rights

The iPhone maker is expanding its sports broadcasting rights in the streaming competition with Netflix and Amazon. Starting in 2023, Apple will have exclusive worldwide streaming rights for Major League Soccer (MLS), the company says. The MLS is the top division of US and Canadian football. Every single MLS game can be streamed through the Apple TV app without blocking or region restrictions. The deal between Apple and MLS is initially limited to ten years.

Coinbase fires employees

Crypto platform Coinbase Global is reacting to the downturn in cyber currencies and is cutting nearly every fifth digit. According to the US company, 1,100 jobs were eliminated last night. This corresponds to 18 percent of the current workforce. Interested persons will be informed by e-mail. Coinbase, which has hired many new employees, especially at the start of the pandemic, expects costs of $ 40 to $ 45 million in connection with the wave of layoffs.

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