FRANKFURT (Dow Jones)–Thursday had it all again: In the morning, the reporting season raged and provided the impetus for the individual values. Indices came under some pressure as investors became more cautious ahead of the European Central Bank’s interest rate decision. Then at 2:15 p.m. the decisions of the European Central Bank ran across the tickers and provided the impetus for stocks, bonds and the euro.
As expected on the stock market in advance, there was a jumbo rate hike of 75 basis points. In addition, the central bank is working on the design of the long-term tenders, which was expected, albeit not in this form. The central bank is thus pursuing the goal of withdrawing liquidity from the financial system. On the other hand, the ECB initially rejected the sometimes feared “quantitative tightening” (QT).
The DAX caught up on previously seen losses and closed 0.1 percent higher at 13,211 points. The share of the real estate group Vonovia, which is considered sensitive to interest rates, rose by 4.9 percent. The Euro Stoxx 50 trended unchanged at 3,605 points. Bonds went up across the board, yields on federal bonds with a term of ten years fell well below 2 percent. And the euro slipped below parity again, trading at $0.9986.
ECB does not want to let inflation expectations get out of hand
The ECB hikes interest rates again by 75 basis points. The central bankers can only do little to curb inflation in the short term. For Jan Holthusen, Head of DZ Bank Research, their resolute stance demonstrates that the institution is not willing to tolerate the massive missed target of two percent in the long term. Nevertheless, the ECB is too late with its rate hikes. Now they’re trying to limit the damage with jumbo rate hikes. The time window could be tight if the euro zone into a deep recession, which is likely. Further interest rate hikes would not be impossible in such an environment, but would be much more difficult to negotiate. Holthusen therefore expects another hike of 50 basis points for December, before a step of 25 basis points at the beginning of next year is likely to mark the temporary end of this rate hike cycle. It was disappointing that there was no news from the central bank on the reduction of its bond holdings (QT).
Credit Suisse loses billions
A write-down brought Credit Suisse a billion-dollar loss. In addition, the major Swiss bank decided on a far-reaching corporate restructuring. Shares fell 18.6 percent after the strategy update. Investors were particularly bothered by two points: the bank announced a billion-dollar capital increase. Such had been expected, but Citigroup speaks of a disappointment in view of the dilution effect. In addition, analysts are bothered by the target for the return on tangible equity (ROTE) for 2025 of around 6 percent. The return on tangible equity is well below the consensus of 6.4 percent.
For AB Inbev, on the other hand, it went up by 5.9 percent after better quarterly figures, and the large brewery also raised its outlook. The quarterly report may have caught some investors on the wrong foot, as the industry is suffering from consumers’ reluctance to spend due to high inflation. However, the thirst seems unbroken and has given the brewery giant a considerable jump in sales, comments Raiffeisen International.
The oil and gas stocks sector was up 3.5 percent, while Shell was up 5.5 percent according to the numbers. Shell’s operating performance in the third quarter came in better than expected for analysts at Jefferies. The oil multinational has also raised the cash flow distribution from the operating business well above the minimum value of 30 percent for the current 2022 financial year.
Among the weaker sectors in Europe were technology stocks, which fell 1.7 percent. Nemetschek presented figures from the sector, and the share fell by 6.9 percent. In the third quarter, sales and earnings climbed, but margins fell. Bryan Garnier’s analysts speak of an erosion of profitability in all business areas.
Daimler Truck is bringing in positive figures
Daimler Truck (+2.7%) benefited from better-than-expected third-quarter figures, especially on the earnings side. At the consumer goods group Beiersdorf, retailers complained that the outlook was too conservative, and the title fell by 3.5 percent. Software AG’s quarterly figures were also mixed (-6.9%). At Lufthansa (+3.2%), the outlook provided support, among other things. The company assumes that demand will continue to be high in the coming months and anticipates an operating profit in the fourth quarter.
Despite increasing sales, Hellofresh (-6.2%) earned significantly less in the third quarter and felt the pressure on margins. At Wacker Chemie (-0.3%), the quarterly figures were weaker, sales were only slightly, but the earnings side was well below the forecast. SMA Solar gained 12.8 percent with a raised outlook.
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Index Closing Development Development Development
. was absolute in % since
. beginning of year*
Euro Stoxx 50 3,604.51 -0.80 -0.0% -16.1%
Stoxx-50 3,508.53 +2.10 +0.1% -8.1%
Stoxx 600 410.19 -0.12 -0.0% -15.9%
XETRA DAX 13,211.23 +15.42 +0.1% -16.8%
FTSE-100 London 7,073.69 +17.62 +0.2% -4.4%
CAC-40 Paris 6,244.03 -32.28 -0.5% -12.7%
AEX Amsterdam 669.40 +3.77 +0.6% -16.1%
ATHEX-20 Athens 2,087.05 -3.30 -0.2% -2.6%
BEL-20 Brussels 3,527.26 -6.30 -0.2% -18.2%
BUX Budapest 40,990.22 +436.66 +1.1% -19.2%
OMXH-25 Helsinki 4,652.43 -19.13 -0.4% -16.2%
ISE NAT. 30 Istanbul 4,283.98 -57.89 -1.3% +111.6%
OMXC-20 Copenhagen 1,640.07 -6.48 -0.4% -12.0%
PSI 20 Lisbon 5,692.79 -17.21 -0.3% +1.9%
IBEX-35 Madrid 7,921.10 +50.50 +0.6% -9.1%
FTSE-MIB Milan 22,590.41 +200.63 +0.9% -18.1%
RTS Moscow 1,105.71 +17.12 +1.6% -30.7%
OBX Oslo 1,079.43 +14.63 +1.4% +1.0%
PX Prague 1,184.14 +5.19 +0.4% -17.0%
OMXS-30 Stockholm 1,968.23 -1.84 -0.1% -18.7%
WIG-20 Warsaw 1,506.74 +19.14 +1.3% -33.5%
ATX Vienna 2,887.32 +24.06 +0.8% -25.5%
SMI Zurich 10,706.62 -110.59 -1.0% -16.9%
* at the end of the day
FOREX last +/- % Thu 8:50am Wed 5:30pm % YTD
EUR/USD 0.9987 -0.9% 1.0063 1.0068 -12.2%
EUR/JPY 145.74 -1.2% 146.56 147.56 +11.4%
EUR/CHF 0.9884 -0.6% 0.9940 1.0146 -4.7%
EUR/GBP 0.8619 -0.6% 0.8678 0.8676 +2.6%
USD/JPY 145.93 -0.3% 145.64 146.55 +26.8%
GBP/USD 1.1587 -0.3% 1.1595 1.1604 -14.4%
USD/CNH (Offshore) 7.2459 +0.7% 7.2255 7.1887 +14.0%
Bitcoin
BTC/USD 20,586.77 -0.8% 20,755.74 20,877.02 -55.5%
ROHOEL last VT-Settlem. +/- % +/- USD % YTD
WTI/Nymex 89.62 87.91 +1.9% +1.71 +28.3%
Brent/ICE 96.77 95.69 +1.1% +1.08 +31.5%
GAS VT Settlem. +/- EUR
Dutch TTF 108.48 104.32 +4.0% +4.16 +52.4%
METALS last day before +/- % +/- USD % YTD
Gold (Spot) 1,661.39 1,664.78 -0.2% -3.39 -9.2%
Silver (Spot) 19.52 19.65 -0.7% -0.13 -16.3%
Platinum (Spot) 963.25 955.38 +0.8% +7.88 -0.8%
Copper Future 3.56 3.57 -0.5% -0.02 -19.6%
YTD relative to previous day’s close
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(END) Dow Jones Newswires
October 27, 2022 12:15 ET (16:15 GMT)
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