STUTTGART (BOERSE STUTTGART GMBH) – Stock market report of the Stuttgart Stock Exchange
Directly from the trading floor: Most traded stocks
Germany
The DAX is taking a breather after the most recent mini rally in mid-July and recently trended sideways around the 13,200 point mark. According to the Handelsblatt survey DAX-Sentiment, long-term capital inflows, especially from abroad, can drive the leading German index further up. Investors were optimistic last week because of the mostly positive outlook from the tech giants. However, the majority of companies in this country have also delivered pleasing company results and have raised their forecasts for the year. RWE is also confident after the good first half of the year and has significantly raised its adjusted operating earnings forecast for 2022. The interest rate hike by the US central bank that was already expected this week failed to shake the stock markets.
Uniper
The individual stocks Uniper from the MDAX and Deutsche Telekom, among others, were actively traded on the Stuttgart Stock Exchange. The energy group Uniper achieved more than 1,000 price determinations. After the gas volumes from Russia have been further reduced, the company is currently only receiving 20 percent of its contractually guaranteed deliveries. However, according to the company, it does not have to take gas from the storage facilities. In order to be able to provide the missing quantities, Uniper has to buy more expensive gas on the market. This leads to liquidity problems. That is why the company recently agreed on a stabilization package with the federal government. The state is also an important shareholder.
Deutsche Telekom
The stock of Deutsche Telekom was less badly hit, losing around 3.6 percent of its value within a week. In the past few weeks, the planned sale of the subsidiary Deutsche Funkturm, which operates almost 34,000 mobile phone masts in Germany, has caused prices to rise. The subsidiary T-Mobile also pleases Telekom shareholders. The company grew in the second quarter and again raises its outlook slightly. The Telekom business figures for the second quarter of 2022 are to be published on August 11.
International
This week, international investors focused on the decision by the US Federal Reserve to raise US interest rates by three-quarters of a percentage point. Immediately after the decision, the stock markets recovered significantly, especially US technology stocks. Despite the sharp increase in key interest rates, bond yields have calmed down. Investors are expecting the Fed to start tapering rate hikes at some point after four significant rate hikes this year. The reason: concerns about a recession or a significant economic slowdown, which are already reflected in numerous US economic data.
Amazon
In Stuttgart, the shares of Amazon and Tesla in particular attracted greater attention from investors this week. At the online shipping giant Amazon, the lowering of Walmart’s profit forecast for the second quarter recently pushed the share price down slightly. Reason for the profit warning: Walmart customers refrained from extensive shopping tours due to inflation. Operationally, Amazon wants to open up new business areas and plans to take over One Medical for 18 billion dollars. In addition to online trading, cloud computing, streaming and gaming, the group wants to expand its involvement in the healthcare sector.
Tesla
Tesla was recently able to shine in the second quarter with top delivery figures and increasing sales and profits. Elon Musk’s group apparently has the delivery and chip bottleneck problems better under control than the competition. The share price recovered in July. Tesla was able to successfully defend its pioneering position in the field of e-mobility against other manufacturers. Musk also wants to conquer new market segments in the future for commercial vehicles or driverless robo-taxis.
special insight
Fed Decision: Is Dollar Strength Becoming a Problem?
In the fight against high inflation, the US central bank stepped up its game on Wednesday and, as expected, increased the key interest rate by 75 basis points for the second time in a row. Compared to the ECB, the US monetary authorities have already implemented a much tighter monetary policy course. The dollar has therefore been appreciating massively for months and recently slipped below par against the euro for the first time since 2002. Since the companies in the S&P 500 generate almost a third of their sales outside the USA, the massive appreciation of the dollar is having a negative impact on their business. But only at second glance.
Based on the results reported so far for the past quarter, the companies reported an increase in sales of around eleven percent. On the other hand, corporations that generate more than half of their sales outside the United States managed a 15 percent increase, while companies that mainly sell domestically achieved a sales increase of just under 10 percent.
Accordingly, the rise in the dollar would not have a negative impact on business. Distorting the balance sheet are Exxon Mobil and Chevron, which generate the majority of their sales overseas and benefited greatly from the rally in energy commodities. Leaving aside the two energy giants, companies that generate more than half their revenues outside the US see sales growth drop from 15 to 9 percent. With dollar strength weighing on both sales and earnings, US Federal Reserve officials will keep an eye on appreciation.
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Source: Boerse Stuttgart GmbH, www.boerse-stuttgart.de
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