DThe stock market in Germany continues to fluctuate strongly with the developments in the Ukraine war. The Dax did not fall below 14,000 points again in the past week, as it did in the previous week. With a slight weekly minus on Friday, it nevertheless approached the weekend at 14,300 points. The weekly winners on the stock exchange included armaments stocks such as Rheinmetall in the M-Dax, but also Deutsche Bank in the Dax. Real estate stocks, among others, developed rather weakly. The reported quarterly results of the companies do not offer a devastating picture. But the proportion of negative surprises is increasing, as Commerzbank emphasizes in an analysis. “Even if the majority of German companies were able to exceed the expectations of the analysts, there are more and more signs of the high production costs and the lack of preliminary products,” says the study: “This should worsen in the coming quarters, especially because of of the war in Ukraine.” That doesn’t sound good.
All Dax companies have now reported for the fourth quarter of 2021. Half of the 40 exceeded market expectations, but seven companies fell well short. So far, 46 companies have reported in the M-Dax of medium-sized stocks; of these, 22 performed better than the market had expected, and 12 were disappointing.
These are not bad values. But compared to previous quarters, the number of downside surprises has increased. And that, mind you, in the last quarter of last year. This picture is likely to darken this year, partly because of the war in Ukraine. This was already evident from the first profit warnings from companies such as KWS Saat, Uniper and Leoni for the current fiscal year. Because of material shortages and increased energy costs, the earnings momentum is likely to level off noticeably at some companies, Commerzbank believes. However, some companies are likely to be able to compensate for increased production costs through savings or higher sales prices: These include the German car industry and companies like Infineon. However, some German companies only have limited savings potential or comparatively little pricing power. This applies in particular to energy-intensive companies – and suppliers with little specialized products.