FRANKFURT (Dow Jones) — The European stock markets went down on Tuesday afternoon, but the low in the morning was once again used by investors to get started. The DAX lost 0.7 percent to 15,821 points, the low was even lower at 15,669 points. The Euro Stoxx 50 falls by 0.6 percent to 4,276 points. Above all, the rise in global yields in view of the galloping inflation is weighing on sentiment.
advertising
l, trade gold, all commodities with leverage (up to 30).
Trade commodities with high leverage and small spreads. You can start trading with as little as 100.00 to benefit from the effects of 3,000 euros of capital!
Note on Plus500: 74% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money. Plus500UK Ltd is authorized and regulated by the Financial Conduct Authority (FRN 509909). Plus500CY Ltd is authorized and regulated by CySEC (#250/14).
The market expects the US Federal Reserve to take an even more aggressive stance on fighting inflation, with four interest rate hikes this year now considered a deal. There are a few who do not rule out the possibility that the first interest rate hike could go up by 50 basis points, while the vast majority assumes an increase of 25 basis points.
There is also a slight upward trend for the yields on Bunds. The strategists at Commerzbank consider it possible that the market interest rates for federal bonds with a term of 10 years will break the zero percent mark for the first time since April 2019 and return to positive yield territory. These are currently yielding minus 0.019 percent.
Brent oil price at highest level since 2014
Brent oil is more expensive than it has been for over seven years. A barrel cost $88.13 at its peak. On the one hand, analysts see growing global demand due to easing concerns about the negative economic effects of the highly contagious omicron variant of the coronavirus as the cause of the price increase. At the same time, concerns about geopolitical tensions are growing, which is also driving prices higher. The latest price spike came after Yemen’s Houthi rebels claimed responsibility for attacks in Abu Dhabi that resulted in a fuel tank explosion.
Analysts at Goldman Sachs expect Brent to rise to $100 by the third quarter of 2022. OECD inventories are set to fall to their lowest levels since 2000 this summer as demand remains resilient despite new variants of Covid-19. At the same time, the analysts question the capacities of the Opec countries for a sufficient expansion of the offer. The sector of European oil stocks is the daily winner with a plus of 1.5 percent.
Earnings season is slowly heating up
Even before the earnings season really gets going, expectations are falling. For market strategist Lale Akoner of BNY Mellon Investment Management, the focus is on margin pressure: “Wages are rising, energy costs are still very high, so inflation will weigh on margins. That will definitely be reflected in profits in 2022.”
In terms of individual stocks, Rio Tinto presented somewhat weaker production figures for the fourth quarter. The shares are up 0.8 percent. Iron ore exports from Australia fell 3 percent year-on-year and even 5 percent in the quarter. The analysts at Jefferies believe that the company’s future profit development will depend entirely on costs and price developments.
Hugo Boss has also presented the first key data. The fashion manufacturer has slightly exceeded expectations. At EUR 228 million, Group EBIT for 2021 was above the market expectation of EUR 210 million. The stock is up 1.9 percent after doubling over the year.
The acquisition of the day is Microsoft’s purchase of video game heavyweight Activision Blizzard in the United States. With the acquisition of a heavyweight in the video game industry, Microsoft is expanding its already no small business in this area. Other technology companies may also be interested in acquisitions to strengthen their position in cloud-based games and a virtual world, Metaverse. The stock market is betting that further deals could follow. Here companies from the gaming industry are mentioned as possible targets – such as Ubisoft, which is increasing by 11 percent.
===
Stock index last +/-% absolute +/-% YTD
Euro Stoxx 50 4,275.35 -0.6% -26.79 -0.5%
Stoxx 50 3,811.46 -0.5% -19.53 -0.2%
DAX 15,820.84 -0.7% -112.88 -0.4%
MDAX 34,232.22 -1.0% -355.07 -2.5%
TecDAX 3,515.30 -1.2% -42.74 -10.3%
SDAX 15,694.37 -1.1% -179.38 -4.4%
FTSE 7,576.15 -0.5% -35.08 +3.1%
CAC 7,152.66 -0.7% -48.98 -0.0%
Fixed income market last absolute +/- YTD
German ten-year return -0.02 +0.01 +0.16
US 10-year yield 1.83 +0.04 +0.32
FOREX last +/- % Tue 7:40 a.m. Mon 5:31 p.m. % YTD
EUR/USD 1.1356 -0.5% 1.1400 1.1406 -0.1%
EUR/JPY 130.10 -0.5% 130.88 130.69 -0.6%
EUR/CHF 1.0407 -0.2% 1.0433 1.0425 +0.3%
EUR/GBP 0.8361 -0.0% 0.8358 0.8355 -0.5%
USD/JPY 114.58 -0.0% 114.82 114.57 -0.5%
GBP/USD 1.3583 -0.5% 1.3639 1.3653 +0.4%
USD/CNH (Offshore) 6.3576 +0.1% 6.3465 6.3521 +0.1%
Bitcoin
BTC/USD 41,629.03 -1.1% 42,273.28 42,348.31 -10.0%
ROHL last VT-Settl. +/- % +/- USD % YTD
WTI/Nymex 84.97 84.30 +1.4% 1.15 +13.0%
Brent/ICE 87.26 86.48 +0.9% 0.78 +12.0%
METALS last day before +/- % +/- USD % YTD
Gold (Spot) 1,817.43 1,819.55 -0.1% -2.13 -0.7%
Silver (Spot) 23.42 23.23 +0.9% +0.20 +0.5%
Platinum (Spot) 981.80 976.50 +0.5% +5.30 +1.2%
Copper Future 4.42 4.43 -0.1% -0.00 -1.0%
===
Contact the author: [email protected]
DJG/thl/ros
(END) Dow Jones Newswires
January 18, 2022 10:16 ET (15:16 GMT)