Auto stocks shine in the eyes of investors

Investors are holding back before the landmark US Federal Reserve date in the evening. But the papers of German car manufacturers stand out in the stock market.

Trademark of the Volkswagen Group at an auto show in Shanghai in 2019

Whe rabbit in front of the queue is waiting for Europe’s investors for signals from the US Federal Reserve. The Dax and Euro Stoxx 50 were more or less on the spot on Wednesday morning with 14,551 and 3845 points. However, German auto stocks are falling into focus due to positive company news.

Against the background of growing inflation concerns, the press conference of Fed chairman Jerome Powell in the evening will become a communicative tightrope act, predicted Olivier de Berranger, strategist at the asset manager La Financiere de l’Echiquier. Driven by the trillion dollar Corona state aid, rising consumer prices must be expected in the coming months. In view of a still battered labor market, it is difficult for the Fed to reduce its support for the economy.

If the central bank does not hold out the prospect of intervening in the event that interest rates continue to rise, that would be something like a license to increase returns, said portfolio manager Thomas Altmann from asset manager QC Partners. Experts then consider a leap in yields on trend-setting ten-year US government bonds above the two percent mark as possible.

Rising yields mean higher financing costs for states and companies, which has been bothering the stock markets in recent weeks. On Wednesday, the T-bonds yielded 1.632 percent. This moved them up slightly from Tuesday and stayed near their thirteen-month high.

In Europe, yields also went up slightly, with ten-year federal bonds yielding minus 0.330 percent. The head of the Slovak central bank, Peter Kazimir, does not see any dramatic development in the recent rise. “Yields are rising, but they are rising from very low levels,” said the Governing Council member on the short message service Twitter.

Volkswagen benefits 1 day

VOLKSWAGEN VZ

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The setback in Astra-Zeneca vaccinations continued to be a topic of conversation on the stock exchanges. Many countries stopped vaccinations with the active ingredient because of possible side effects.

In contrast, the overall increase in vaccination rates worldwide and a decrease in the number of corona cases in some countries gave investors further encouragement. “Overall, the latest news is good news for equity investors. You can expect economic improvements, ”said the experts from Nikko Asset Management. This was also reflected in rising raw material prices. A ton of the industrial metal copper rose 0.6 percent to $ 9017.

In the individual stocks, Volkswagen and BMW drove away from the other Dax stocks after an optimistic outlook. Volkswagen expects its core brand VW to deliver, sales and earnings above the previous year’s level in 2021. The papers rose at their peak by 5.3 percent. At 218.85 euros, they were higher than they had been since June 2015.

BMW ST

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The Munich competitor BMW is also assuming growth again after a slump in profits this year. The outlook appears very confident, commented the analysts from Raiffeisen Research. “The offensive in terms of e-mobility in particular sounds like a strong announcement.” BMW shares jumped 4.7 percent to a two-and-a-half-year high of 84.26 euros.

In Vienna, Verbund’s titles plummeted by more than four percent. Austria’s largest electricity company came through the Corona crisis quite well in the past financial year thanks to increased wholesale prices, but is preparing for losses for the current financial year.