This week the trade conflict between the USA and China remained tense, but the customs break was extended by 90 days. US generator prices surprisingly rose in July, which indicates rising production costs. In Germany, inflation remained 2.0 %, although food was particularly expensive. Thyssenkrupp lowered his annual outlook, but continues to drive the conversion and partial exchanges. Intel checks a possible entry of the US government to support chipfearing in Ohio, the share increased significantly.
Global stock market – record high in outlook
While most global indices have a solid upswing around the weekend, the German leading index DAX® is on record high hunt. The DAX® approaches its record high of 24,639 points on Friday afternoon with 24,505 points and is around 1.19 percent in the afternoon. Compared to the pre -week closing course, the Dow Jones Industrial Average® was up to around 1.67 percent on Thursday evening and the S&P 500® also increased by around 1.24 percent. The technology-based NASDAQ-100 Index® was around 0.94 percent above the pre-week closing course on Thursday evening.
Commercial conflict – temporary ceasefire
The trade conflict between the USA and China remains tense, but is currently without further escalation. This week the existing customs break was extended by 90 days. US President Trump announced this decision just a few hours before the deadline. As a result, planned drastic increases were exposed to up to 145 %. In return, China also dispensed with announced customs increases of up to 125 %. Both sides continue their conversations in Geneva, London and Stockholm. The goal is a possible summit between Trump and XI Jinping in autumn. Companies in the United States welcome the extension as short -term planning security. Despite the break, the import volume from China remains significantly below the level of 2018. Judges in the United States also question the legality of the so-called “Liberation Day” tariff. The markets reacted behavior, with slight relaxation, but continuing uncertainty.
US producer prices-clear increase in July
In the middle of the international customs conflict, the US producers noticeably increased their prices in July. According to the Ministry of Labor, producer prices rose by 0.9 percent compared to June after stagnating in the previous month. Compared to the same month last year, the increase was 3.3 percent. The producer prices used to be an indicator of the development of consumer prices. The inflation was 2.7 percent each in June and July. Without energy and food, core inflation climbed to around 3.1 percent in July. In April, US President Donald Trump imposed high special tariffs on imports from numerous countries. With some states, there are now agreements, with China the negotiations last.
Inflation – German inflation in July stable at 2.0 percent
Inflation in Germany was around 2.0 percent in July and June. According to the Statistical Federal Office, falling energy prices continued to dampen the overall inflation, while service prices remained high in the year at +3.1 percent. Food was more expensive by around 2.2 percent. Energy prices dropped by 3.4 percent, especially due to cheaper electricity, heating oil and district heating. The core inflation without food and energy remained stable at around 2.7 percent. Compared to the previous month, the consumer price index rose by 0.3 percent, which was particularly due to seasonally related price surcharges on international flights (+12.7 percent) and package tours (+10.7 percent).
Thyssenkrupp – view reduced, conversion is progressing
Thyssenkrupp has corrected his annual outlook down and now expects up to 3 percent with a decline in sales of 5 to 7 percent. The adjusted operational result (EBIT) is expected at the lower end of the range of EUR 600 million to EUR 1 billion, while the Free Cashflow view remains unchanged. In the third quarter, the adjusted EBIT was around EUR 155 million, an increase of around 4 percent in the year, while the loss of the quarter expanded to EUR 278 million. Weaker businesses in the areas of car, steel and materials were stressful; The proceeds of the first nine months dropped by EUR 1.7 billion to around EUR 24.6 billion. The marine division developed positively with strong new business. The group drives the planned part of Marine Systems ahead as well as the spin -off of the steel business. In addition, a cost reduction package was agreed with employee representatives. In parallel, talks with investor Daniel Křetínský about an increase in his steel participation from 20 % to 50 %. The stock temporarily lost more than 8 %during the week.
Intel-US government checks entry, stock increases
According to reports, the US government has talks about a possible start to Intel to support the planned chipfearing in the state of Ohio. The share then rose by almost seven percent on Thursday evening shortly before New York. Intel has been in the crisis for several years, the discussion about CEO Lip-Bu Tan and his connections to China had recently caused volatility. U.S. President Trump praised Tan after a meeting after there were previously claims for resignation. The background is political and economic considerations that are supposed to strengthen national semiconductor production. The talks between Intel and the government are currently underway, and an official statement by Intel has not yet been. Investors react positively to the prospect of state support that could ensure the expansion of manufacturing capacities.
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Source: HSBC