Rising technology stocks: happy ending on the stock market

market report

Status: 13/05/2022 22:06

Fed Chairman Jerome Powell reassured investors with his statements about future rate hikes. Wall Street and European equity markets rallied sharply. Tech stocks in particular were in demand at the end of the week.

Interest rates and economic worries have been weighing on global equity markets for days. Investors fear the Fed will adopt more aggressive rate hikes to fight persistently high inflation. The US Federal Reserve could raise interest rates by 0.75% instead of just 0.5% at its next meeting in June. Fed Chairman Jerome Powell has now eased concerns over a steep rate hike. He reiterated his expectation that the central bank will raise interest rates by half a percentage point in each of the next two meetings.

Wall Street on the run for recovery

The statements provided relief for international stock exchanges at the end of the week. Wall Street has recovered significantly from recent price losses. The Dow Jones was up 1.5% after falling to its lowest level since March 2021 yesterday. In particular, hard-hit tech stocks have made a comeback. The high-tech Nasdaq was up about 3.7%. On a weekly basis, US stock exchanges still close in the red.

DAX makes a weekly profit for the first time in a long time

Signs of recovery were also recorded on the European stock exchanges. The DAX gained a lot of ground and closed 2.1% higher than the round mark of 14,000 points. On a weekly basis, it gained 2.6%. The main German index ended a week in negative territory for the first time since the end of March.

Still no turnaround

However, experts see no real reason for a turnaround. “Calm is returning, but no key news to suggest the fund is at the bottom,” said market watcher Fawad Razaqzada. Because the negative factors that had plunged prices in recent weeks have not disappeared: the war in Ukraine is raging, the US Federal Reserve is in the midst of a cycle of interest rate hikes, and China is fighting the resurgence of the coronavirus pandemic. with rigid blockades, which puts a strain on economic processes around the world. “If an economic slowdown were to occur, things could get uncomfortable in the markets,” warned market watcher Christian Henke of brokerage house IG.

Economy update 13/05/2022

Klaus-Rainer Jackisch, HR, tagesschau24 9am, May 13, 2022

Bitcoin returns above $ 30,000

However, economic fears were put aside today. Bitcoin investors have also used recent price losses to re-enter. The oldest and most prominent cyber currency earned a whopping seven percent at $ 30,542. “It remains to be seen whether the recovery attempt will be sustainable,” said Emden Research analyst Timo Emden. “All the recent counter-movements were of a temporary nature and were regularly sold out again.”

A little more expensive oil again

The discussion on the EU embargo on Russian oil supplies has pushed oil prices up again. The North Sea Brent variety increased in price by three percent to $ 110.78 per barrel (159 liters). However, speculation about lower demand from the largest customer, China, has slowed the rise due to the present economic risks. Ongoing blockages in Shanghai are putting a strain on the economy and supply chains.

Industrial production in the euro area is decreasing

The likelihood of an economic slowdown or even a recession in Germany is increasing. Eurostat reported today that industrial production in the euro area fell by 1.8 percent in March from the previous month. In addition to the further increase in energy prices following the war in Ukraine, industrial companies are still struggling with the severe shortage of important primary products such as semiconductors. This problem was also exacerbated in part by the Russian invasion, since, for example, wiring harnesses made in Ukraine were missing from eurozone car production.

Twitter down

Speculation about Elon Musk’s end of the takeover is plunging Twitter. Twitter shares plummet 11%. Tesla boss Elon Musk suspended his $ 44 billion acquisition and justified it with missing information on the number of spam and fake accounts at the short messaging service. Tesla shares gained 6%.

EnBW Utility Earns More

Energy group EnBW announces that adjusted operating income (Ebitda) increased approximately 46% to 1.2 billion euros in the first quarter. Higher electricity prices, better wind conditions for onshore and offshore wind turbines and newly commissioned solar parks all contributed positively to the result. The group is also making good progress in replacing the purchase of Russian gas and coal. As early as mid-August, EnBW will no longer buy coal from Russia.

Freenet confirms the forecasts

After a mixed start to the year, mobile phone provider Freenet maintains its forecasts for 2022. First quarter sales decreased slightly to € 616.8 million compared to the corresponding period of the previous year. Freenet thus missed the average expectations of analysts. The profit before interest, taxes, depreciation (Ebitda), on the other hand, rose to 118 million euros, beating consensus.

Telekom sales increase

In the first quarter, Deutsche Telekom’s revenue increased 6.2 percent to a whopping 28 billion euros. Europe’s largest telecommunications group benefited from service revenues, which grew at a disproportionate pace. At € 2.2 billion, net profit was almost double compared to a year ago.

Impetus for Deutsche Euroshop

The mall-specialist Deutsche Euroshop real estate group benefited from the easing of krona-related restrictions in the first quarter. While sales in the first quarter only increased 0.3% year-on-year to € 52.1 million, earnings before interest and taxes (EBIT) increased nearly a quarter to € 39.3 million. since significantly lower valuation allowances were made on rental credits. The bottom line is that profits increased by nearly ten percent to € 24.5 million.

Ceconomy is back on the path of growth

Electronics retailer Ceconomy also benefited from the recovery of its stationary business in the second quarter of fiscal 2021/22. Sales increased from 4.3 billion to five billion euros, as announced by the holding company of the two chains Media Markt and Saturn. Adjusted for currency and portfolio effects, this growth was 18.8%. Coronavirus-related store closings led to a decline in the first quarter. The operating loss (EBIT) adjusted for special effects went from 146 million euros to 62 million euros.

Vitesco gets many orders in the electrical sector

Auto parts supplier Vitesco is making good progress in collecting orders for its electric drive division. In the first quarter, orders for electrical components, just under 3.7 billion euros, accounted for the lion’s share of the 4.5 billion euros in orders received. The e-drive division still has relatively low sales at the spun off auto supplier Continental and is still in the red, but should be the mainstay going forward.

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