MARKETS EUROPE/Rising yields end bear market rally | news
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By Herbert Rude
FRANKFURT (Dow Jones) — The European stock markets continued to show losses on Thursday afternoon. The DAX lost 0.5 percent to 12,680 points, the Euro-Stoxx-50 fell by 0.1 percent to 3,468 points. That seems to be the end of the recent bear market rally, after sending the DAX up a good 900 points in just four trading days. The German producer prices underline the existing inflation risks. In September, they increased by 2.3 percent compared to the previous month, an increase of 1.5 percent had been expected. As a result, the ECB remains under increased pressure to act, and yields on the bond markets continue to rise across the board.
According to Jürgen Molnar from Robomarkets, the rising yields are overshadowing the good reporting season. “The reaction of Tesla shares to record figures for profit and sales in the third quarter also shows how blank the nerves are,” said the market analyst. Even announced share buybacks and the confirmation of the ambitious sales target of 1.4 million vehicles for 2022 could not compensate for the slight lack of sales expectations, the share lost six percent in after-hours trading.
Meanwhile, the government crisis in Great Britain continues to escalate. After the resignation of Home Secretary Suella Braverman, British Prime Minister Liz Truss came under further pressure after a chaotic vote in the House of Commons. “That doesn’t go down well on the stock exchanges,” says Thomas Altmann, portfolio manager at QC Partners. On Thursday, however, the FTSE-100 was still doing relatively well with a minus of 0.3 percent.
Outlook weighed down by Deutsche Börse
According to their third-quarter figures, Deutsche Börse lost 3.5 percent. Some investors may be concerned about the company’s outlook. Although this was raised after strong numbers, Citigroup wonders why the targets were not raised more. Either the stock exchange operator is overly cautious, or he may be expecting a sharp increase in operating costs in the fourth quarter.
ABB fall 0.8 percent. The company believes that it can probably achieve the margin target for 2023 a year earlier than planned. Revenue rose 5 percent, as expected, to $7.41 billion in the third quarter. According to a statement from the trade, the operating profit is convincing with a plus of 16 percent as well as the margin of 16.6 percent. However, according to Berenberg analysts, incoming orders suffered from currency headwinds.
Ericcson sag – and Nokia too
According to their numbers, Ericsson downright slumped by almost 16 percent. Both the quarterly figures and the outlook are below expectations. According to Citigroup, the increasing cost pressure is likely to continue, so that the question must be asked whether the company can expand its margins by one percentage point in the coming year. Despite a better-than-expected sales development in the third quarter, Nokia are also on the losing side, falling by almost 8 percent. The development of the gross margin is greeted with disappointment.
Akzo’s outlook could weigh
Akzo lose 1.9 percent. The third quarter went in line with expectations. What the Jefferies analysts criticize in an initial assessment is the outlook for the fourth quarter. But they also rate the receipt of the 2023 forecast as negative. For the fourth quarter, the Dutch paint manufacturer, which owns the brands Dulux, Polycell and Cuprinol, now expects EBIT to be below EUR 150 million, while the consensus is significantly higher at EUR 210 million.
Yara pull hard and take K+S with them
Yara’s figures for the third quarter are good, the share is up almost 6 percent against the trend. Analysts point out positively that the EBITDA in the reporting period of 1 billion dollars was around 30 percent above market expectations. Citi analysts say the spread between European gas and ammonia prices has narrowed recently, allowing production to resume soon. With a special dividend of 10 crowns per share, the shareholders are thought of. K+S gain 4.7 percent.
The Hermes interim report was also significantly better than expected, with shares in the French luxury goods group up 1.4 percent.
Porsche AG at a new high – according to Tesla interim report
In the DAX, Rheinmetall gained 4.4 percent with a buy recommendation from Goldman Sachs. And the shares of the new Porsche AG mark a new high, rising by 0.6 percent to 93.96 euros. One dealer suspects that the reason could be shifts from Tesla shares.
Stock index last +/-% absolute +/-% YTD
Euro-Stoxx-50 3.468,14 -0,1% -3,10 -19,3%
Stoxx 50 3,410.43 -0.2% -5.91 -10.7%
DAX 12.679,86 -0,5% -61,55 -20,2%
MDAX 23,015.77 +0.1% 31.00 -34.5%
TecDAX 2.717,25 -0,1% -1,67 -30,7%
SDAX 10,730.66 -0.6% -69.87 -34.6%
FTSE 6.930,19 +0,1% 5,20 -6,2%
CAC 6.062,89 +0,4% 22,17 -15,2%
Fixed income market last absolute +/- YTD
German ten-year return 2.38 +0.00 +2.56
US 10-year yield 4.11 -0.02 +2.60
FOREX last +/- % Thu 8:25am Wed 5:20pm % YTD
EUR/USD 0,9797 +0,2% 0,9785 0,9787 -13,8%
EUR/JPY 146.68 +0.1% 146.72 146.49 +12.1%
EUR/CHF 0.9833 +0.1% 0.9836 0.9967 -5.2%
EUR/GBP 0,8745 +0,4% 0,8722 0,8697 +4,1%
USD/JPY 149,74 -0,1% 149,96 149,70 +30,1%
GBP/USD 1,1203 -0,1% 1,1219 1,1254 -17,2%
USD/CNH (Offshore) 7,2410 -0,4% 7,2467 7,2646 +14,0%
BTC/USD 19.234,44 +0,2% 19.121,63 19.220,54 -58,4%
ROHOEL last VT-Settlem. +/- % +/- USD % YTD
WTI/Nymex 86,98 85,55 +1,7% +1,43 +23,6%
Brent/ICE 93,70 92,41 +1,4% +1,29 +27,4%
GAS VT-Settlem. +/- EUR
Dutch TTF 126,20 112,51 +12,2% +13,69 +81,7%
METALS last day before +/- % +/- USD % YTD
Gold (Spot) 1.638,83 1.629,15 +0,6% +9,68 -10,4%
Silver (Spot) 18.76 18.48 +1.5% +0.29 -19.5%
Platinum (Spot) 895.75 886.93 +1.0% +8.83 -7.7%
Kupfer-Future 3,39 3,34 +1,5% +0,05 -23,5%
YTD relative to previous day’s close
(END) Dow Jones Newswires
October 20, 2022 6:48 AM ET (10:48 GMT)
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