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From Herbert Rude
FRANKFURT (Dow Jones) – After the recent rally, Europe’s stock exchanges are taking a breather at the end of the week. After the price upswing with four record days in a row, the DAX fell by 0.7 percent to 14,461 points at noon. The Euro-Stoxx-50 gives way by 0.6 percent to 3,824 points. Turnover is thin: traders point to small profit-taking before the weekend, but also to the fact that returns are already on the way up again, starting from the USA. “After the ECB is before the Fed,” says one market participant.
After the ECB is before the Fed
The European Central Bank (ECB) has announced, as hoped, that it will increase the pace of bond purchases again. The yields on US bonds are increasing significantly, however, the yield on ten-year US bonds rises to 1.61 percent and is thus already back at the high for the year.
“Bond trading cannot resist the temptation to put pressure on the US Federal Reserve in the run-up to next Wednesday’s meeting,” said Robert Rethfeld from Wellenreiter-Invest. “As the upward pressure on yields continues, reaching the 2 percent mark should be the next goal,” he says about 10-year US bonds.
Should the ten-year US yield rise to 1.80 percent or more in the run-up to the meeting, the Fed should consider announcing an “Operation Twist”, ie selling short-term customers and buying long-term customers. “That could calm the stock markets,” said the analyst from Wellenreiter-Invest. On the other hand, if the Fed did not react despite rising yields, the likelihood of a correction in the equity markets in the second half of March would be high, he says.
Technology stocks suffered from rising yields on Friday, and their recent recovery is now being sold off. Your Stoxx industry index falls by 2 percent. In contrast, the banks’ index benefited with a plus of 1.1 percent from the expectation of higher profits from interest business.
Daimler weak – Renault stake placed
The Daimler share fell by 2.6 percent to 70.21 euros. The burden here is that Renault sold its entire stake in Daimler as part of an accelerated bidding process. According to the announcement, Renault’s stake corresponds to around 1.54 percent of Daimler’s share capital. As Renault announced, the package was placed at 69.50 euros per Daimler share. The proceeds are around 1.14 billion euros. “The timing was very well chosen,” said one stock trader.
In the DAX, BMW and VW also give way. On the winning side is Deutsche Bank, whose price increases by 1 percent with rising returns at the long end.
One market participant sees the figures from Essilorluxottica as a positive surprise. The company exceeded market expectations for EBIT in the second half of the year, despite lower sales in the final quarter. It was observed that the business at Essilor performed better. For the year 2021, the French-Italian eyewear company is hoping that performance will return to pre-pandemic levels. The share still loses 1.1 percent.
RTL and Aurelius by numbers more solid
A market participant assesses the 2020 figures from RTL (+ 0.5%) as slightly positive on the earnings side. While the decline in sales was expected in this context, EBIT and consolidated profit exceeded market expectations, in some cases significantly. The dividend proposal of 3 euros is slightly positive, the outlook is “in line”.
Up potential is seen in retail after the announcement of preliminary business figures at Aurelius. At 431 million euros, EBITDA was above market estimates, they say. Aurelius gain 8.1 percent.
According to the interim report for the fourth quarter, Burberry shares are up 5.6 percent. The analysts from RBC rate positively that the like-for-like sales have increased more clearly than expected and the EBIT margin in the 15.5 to 16.5 percent range is well above the consensus of 13.7 percent. This means that the estimates for the coming year should also be raised significantly. After the positive statements from Prada and the Burberry announcement with the confirmation of a good start in 2021, other companies in the sector should also benefit.
Last stock index +/-% absolute +/-% YTD
Euro-Stoxx-50 3,823.80 -0.57 -21.84 7.63
Stoxx-50 3,256.52 -0.57 -18.55 4.77
DAX 14,461.45 -0.74 -107.94 5.41
MDAX 31,600.22 -1.05 -336.81 2.61
TecDAX 3,327.83 -0.96 -32.35 3.58
SDAX 15,328.07 -0.48 -74.49 3.81
FTSE 6,717.33 -0.29 -19.63 4.28
CAC 6,026.12 -0.13 -7.64 8.55
Bond market recently in absolute terms +/- YTD
German ten-year return -0.31 0.03 -0.55
U.S. ten year return 1.61 0.07 -1.07
Forex last +/-% Fri, 8:20 a.m. Thu, 6:03 p.m.% YTD
EUR / USD 1.1914 -0.57% 1.1944 1.1974 -2.5%
EUR / JPY 129.96 -0.06% 130.14 129.86 + 3.1%
EUR / CHF 1.1091 + 0.06% 1.1080 1.1073 + 2.6%
EUR / GBP 0.8563 -0.04% 0.8565 0.8568 -4.1%
USD / JPY 109.07 + 0.51% 108.96 108.45 + 5.6%
GBP / USD 1.3914 -0.53% 1.3946 1.3976 + 1.8%
USD / CNH (offshore) 6.5093 + 0.47% 6.4856 6.4868 + 0.1%
BTC / USD 56,743.25 -2.11% 56,737.50 56,837.25 + 95.3%
ROHL last VT-Settl. +/-% +/- USD% YTD
WTI / Nymex 65.72 66.02 -0.5% -0.30 + 35.0%
Brent / ICE 69.54 69.63 -0.1% -0.09 + 34.5%
METALS last previous day +/-% +/- USD% YTD
Gold (spot) 1,700.24 1,722.70 -1.3% -22.47 -10.4%
Silver (spot) 25.49 26.18 -2.6% -0.69 -3.4%
Platinum (spot) 1,181.00 1,199.88 -1.6% -18.88 + 10.3%
Copper future 4.07 4.14 -1.7% -0.07 + 15.7%
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(END) Dow Jones Newswires
March 12, 2021 6:33 AM ET (11:33 GMT)