Status: 04.03.2021 6:37 p.m.
The soaring on the stock exchanges has stopped for the time being: The DAX moved away from its record high on Thursday. A little relief came from Wall Street and the OPEC meeting.
The slow easing of the corona lockdown promised by the federal government did not cause any more jumps in joy on the German stock market today. On the contrary: the DAX temporarily fell below the 14,000 point mark. It was not until the afternoon that it regained it and closed 0.2 percent lower at 14,056 points. On Wednesday, the leading German index had reached a record high of almost 14,200 points.
Wall Street struggles
The friendly Wall Street prevented major price losses on the German stock market. The big brother of the DAX, the Dow Jones, rose by 0.2 percent in the first two hours of trading. The market-wide S&P 500 turned slightly into positive territory. And the Nasdaq 100, which at times had slumped by a little more than one percent, recovered and rose 0.3 percent.
Promising economic data from the USA
After a somewhat gloomy start, better-than-expected economic data supported the US stock exchanges in the course of trading. While slightly more people filed for unemployment benefits last week than the previous week, productivity in the U.S. economy fell less sharply than expected in the fourth quarter of 2020. In addition, orders for US industrial companies rose faster than forecast at the beginning of the year. Finally, the statements of the Saudi oil minister also helped, who pleaded for a cautious production policy during the OPEC meeting on the production strategy for crude oil from April onwards.
Under the spell of bond yields
Nevertheless, there was still great nervousness in view of the ongoing interest rate fears. The yield on ten-year US Treasuries remained at 1.47 percent. Last week, the effective interest rate reached around 1.55 percent, its highest level in a year. Rising growth and inflation expectations are considered to be the trigger for the rise in yields. This is a danger for equity investors, as bonds become more interesting as an investment alternative as interest rates rise. Refinancing can also become more expensive for companies.
Was sagt Powell?
Investors are now eagerly awaiting a speech from Federal Reserve Chairman Jerome Powell that is due in a few hours. This is his last chance to comment on developments in the bond markets before a two-week standstill period begins on the weekend before the next meeting of the central bank’s open market committee, analysts said. This makes important monetary policy decisions such as setting the key interest rate. Despite the last soothing words from the Fed chief that a tightening of monetary policy is far from pending, the “inflation specter” persisted in the markets.
“Investors are currently examining exactly how willing the central banks are to buy more bonds in view of the rising inflationary pressure in order to counter the rise in interest rates,” said market observer Jochen Stanzl from online broker CMC Markets. “Rising interest rates are effectively a form of monetary policy tightening, and right now that doesn’t play into the cards of the stock market, which is used to the opposite,” he said.
Oil prices are jumping up sharply
The prospect of an extension of Saudi Arabia’s voluntary production cuts drove oil prices soar on Thursday. The North Sea variety Brent and the US variety WTI increased in price by more than five percent to 67.47 and 64.51 dollars per barrel respectively. During the consultations of the Organization of Petroleum Exporting Countries and its cooperation partners (OPEC +) on Thursday, Saudi Arabia had an insider offered to extend its cuts of one million barrels a day into April.
In addition, the big oil exporters wanted to keep their current production volume at the current level overall in April, as two insiders from the environment of the oil cartel told Reuters. Russia and Kazakhstan have only been granted moderate production expansions. In view of the recovery in oil prices, Opec + had actually discussed an increase in production volumes by 500,000 barrels per day.
The changes in the indices
The index changes that had been decided played a role in the DAX. Siemens Energy will replace the Beiersdorf share on March 22, as many experts suspect, while HelloFresh will remain in the MDAX due to the stricter stock exchange rules. In addition to Beiersdorf, the VW holding Porsche, the energy park operator Encavis and the wind turbine manufacturer Nordex will also be there.
VW shares soar
Volkswagen was once again high on the DAX winners list with a plus of two percent. The shares climbed to their highest level since the beginning of 2018. Defensive stocks such as RWE were also in demand. The utility’s stocks benefited from a buy recommendation from Société Générale. The shares of the chip company Infineon ranked at the end of the DAX.
Horror year for Lufthansa
Due to the Corona crisis, Lufthansa made the highest loss in company history last year. It amounted to 6.7 billion euros. In the previous year the company had made a profit of 1.2 billion euros. Due to the slump in demand, the number of passengers reached 36.4 million, only a quarter of the previous year’s figure. Sales fell by 63 percent to 13.6 billion euros.
In the short term, however, the MDax Group does not trust itself to be able to make a concrete business forecast. For 2021 Lufthansa boss Carsten Spohr expects an operating loss across the group, but it will be less than in 2020. Lufthansa will not become profitable again until 2022. At the same time, the airline is working “intensively” on an even closer network with Deutsche Bahn. In addition to common routes in Germany, a “joint product” will also be brought onto the market with the Deutsche Bahn, announced Spohr.
Vonovia earns more
For Germany’s largest real estate group Vonovia, business is going well even during the corona pandemic thanks to rising rents. In 2020, the operating profit (FFO) increased year-on-year by 10.6 percent to 1.35 billion euros. The shareholders, who are to receive a dividend of 1.69 euros per share for 2020 as planned, should also benefit from the increase in earnings. That would be 0.12 euros more than a year earlier. Vonovia confirmed its goals for the current year.
Merck is growing
Darmstadt-based Merck is giving tailwind to high demand for its products in the corona pandemic. In 2020, sales rose by 8.6 percent to 17.5 billion euros. Adjusted operating profit climbed 18.6 percent to 5.2 billion euros. In the wake of the pandemic, the group benefited primarily from a strong life science business that offers products for pharmaceutical research.
Henkel hopes for 2021
Last year, the sales of the consumer goods group Henkel shrank to 19.3 billion euros. In the previous year it was 20 billion. Adjusted operating profit (EBIT) fell by 19.9 percent to 2.6 billion euros. In the Corona crisis, the cyclical adhesives business in particular suffered, but business with hairdressers was also not going well due to the temporary closings of salons. Henkel now expects sales and earnings to grow in 2021.
Knorr-Bremse in line with expectations
In 2020, the revenue of the truck and train brake manufacturer Knorr-Bremse fell by a good eleven percent to just under 6.2 billion euros. Earnings before interest, taxes, depreciation and amortization (Ebitda), which experts focus on, fell by almost 17 percent to around 1.1 billion euros. With the 2020 result, Knorr-Bremse met the experts’ expectations.
Evonik feels the corona crisis
In 2020, the consequences of the corona pandemic hit the office above all else. The car crisis and the slump in oil prices left their mark, especially in the first half of the year. In addition, prices for the animal feed protein methionine came under pressure again towards the end of the year. Consolidated sales fell by seven percent to 12.2 billion euros in 2020 and operating profit fell by eleven percent to 1.91 billion euros. The bottom line is a profit of 465 million euros. In the previous year it was 2.1 billion.
Profits melt away at ProSiebenSat.1
Last year, ProSiebenSat.1 was able to keep its sales almost stable at 4.05 billion euros, but the profit for shareholders fell by 35 percent to 267 million euros. Only the dating portals of the Parship Meet group were able to increase their operating results.
Good demand from Drägerwerk
The strong demand for ventilators and masks brought the medical and safety technology group Drägerwerk an even bigger profit jump than expected in the past year. The surplus was around 250 million euros. A year earlier, the result was 33.4 million euros. Incoming orders grew by around 35 percent to just under 3.8 billion euros.
Hyundai corrects itself
The South Korean carmaker has to retrospectively correct its quarterly profit by around a fifth due to an expensive battery recall campaign. The fourth quarter operating profit is now 1.3 trillion won (959.6 million euros). At the end of January, the company had reported 1.6 trillion won.
The $ 900 million recall requires replacing the batteries of some electric cars. This particularly affects the Kona model, the manufacturer’s best-selling electric car after batteries caught fire.
Delivery service Deliveroo before IPO
The British food delivery service Deliveroo has been targeting one of the largest IPOs in the British capital in three years. With the new issue, which is expected in the first half of the year, Deliveroo could be valued at around seven billion dollars.
Deliveroo competes with Just Eat Takeaway.com, among others. In the meantime, the company, known for its turquoise warming boxes, was also active in Germany, but withdrew again in 2019 in view of the fierce competition.
Square buys music service from Jay-Z
Square’s shares fell about four percent. The payment company of Twitter boss Jack Dorsey takes over the majority of the music service Tidal from rap star Jay-Z for 297 million dollars. Jay-Z is slated to join Square’s board of directors as part of the deal. Dorsey founded Square while on hiatus from Twitter and heads both companies.