Market report: Fear of interest rates is making a comeback

Market report

Status: 11/11/2021 7:48 a.m.

The renewed fear of rate hikes is troubling stocks. The DAX should start the new trading day with losses. Gold and Bitcoin remain in demand as protection against inflation.

The DAX should go into XETRA trading at a small discount. Banks and brokers are currently assessing the German benchmark index 0.2 percent lower at 16,036 points.

Newly flared interest rate fears weigh on the prices. After the US Federal Reserve confirmed last week that inflation was temporary and that a turnaround in interest rates was a long way off, the market now has increasing doubts about this assessment.

Doubts about the Fed’s reading

The US inflation rate had surprisingly increased by 6.2 percent in October, the highest rate in 31 years. This fueled speculation in the market that the Federal Reserve (Fed) would have to tighten the reins of monetary policy sooner and more.

“Even if the Fed believes that inflation is temporary, there is increasing evidence that this is not true,” said Rick Meckler, partner at asset manager Cherry Lane.

The indices in New York recorded losses across the board: the US standard value index Dow Jones closed 0.7 percent lower to 36,079 points. The broad S&P 500 lost 0.8 percent to 4646 points.

The losses in tech stocks were particularly noticeable; these usually react particularly sensitively to rising inflation and, as a result, possibly tighter monetary policy. The technology-heavy selection index Nasdaq 100 fell 1.4 percent to 15,986 points. The Nasdaq Composite fell 1.7 percent to 15,622 points.

Despite the mixed guidelines from Wall Street, stocks in the Asian markets are on the upswing. The Japanese Nikkei has just left the trade with a plus of 0.6 percent to 29,278 points. The Shanghai stock exchange is currently 1.0 percent up.

In the foreign exchange market, speculation about rate hikes has given the dollar new impetus. In return, the euro is coming under pressure. The European common currency slipped as low as 1.1464 dollars in early trading, making it as cheap as it has been in over a year.

The “anti-inflation currency” gold also remains in demand. In the morning, the troy ounce of gold costs $ 1,855, 0.4 percent more than the day before. The yellow precious metal is thus staying close to its four-month high, which was marked just yesterday.

Other investors looking for inflation protection, on the other hand, are turning to crypto currencies such as Bitcoin or Ethereum. In the morning, both cyber currencies are going down slightly after they hit new record highs yesterday at $ 69,000 and $ 4,867.60, respectively.

Given the momentum currently prevailing in the crypto market, some experts expect Bitcoin to soon hit the $ 100,000 mark. The fact that cryptocurrencies are really useful as protection against inflation is, however, controversial among experts.

Siemens closed the first fiscal year under the leadership of Roland Busch with a strong profit jump. The profit after tax rose by 59 percent to 6.7 billion euros. Siemens thus exceeded its forecast, which had already been raised three times in the course of the fiscal year.

The energy group RWE can continue to recover from the weak start to the year. The bottom line was that with 1.0 billion euros from January to September, almost 30 percent more were stuck than in the same period of the previous year. The company confirmed the full-year forecast.

The commercial vehicle manufacturer Daimler Truck wants to inform investors about its strategy today (2 p.m.) at an online conference. The large division with more than 100,000 employees will be separated from the Daimler Group and listed on the stock exchange before Christmas.

The Bayer Group has lost another US case allegedly due to damage to health caused by the chemical PCB, which has been banned for decades. A jury in Seattle awarded a total of $ 62 million in damages to students, parents and staff at a local school. The plaintiffs blame the environmental toxin PCB from US manufacturer Monsanto, which Bayer acquired in 2018, for brain damage and other serious diseases.

The US meat substitute manufacturer Beyond Meat, known for its vegan burgers, has shocked investors with a weak business forecast. Yesterday, the share fell by almost 20 percent at times after the hours of trading after the company issued a surprisingly cautious outlook for the final quarter and warned of possible sales difficulties.

Two years after its launch, the growth of the streaming service Disney + is slowing. At the end of its second fiscal year, the service had 118 million subscribers worldwide. However, experts had hoped for a total of at least 125 million subscribers. The bottom line was a profit of $ 160 million for the past fiscal year.

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