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    VOW3   DE0007664039

VOLKSWAGEN AG

(VOW3)
  Report
Real-time Estimate Tradegate  -  06:53 2022-12-05 am EST
140.73 EUR   +1.23%
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Swedish rate hike jolts stocks as Wall Street turns to Fed

09/20/2022 | 08:15am EST

* Swedish central bank hikes by 1 percentage point

* Dollar steady near two-decade highs

* Fed, BoE and Swiss central banks eyed

* German bond yields highest since 2011

* Demand for Porsche listing strong

* U.S. 2-year bond yield highest since 2007

LONDON, Sept 20 (Reuters) - Stocks fell on Tuesday ahead of more interest rate increases from central banks to cool decades-high inflation, with Sweden leading a round of anticipated hefty hikes from its U.S., Swiss and British counterparts later in the week.

Shares in Europe turned lower by mid-session after U.S. stock futures eased, with the Federal Reserve kicking off a two-day meeting.

The dollar was near a two-decade high versus major peers, underpinned by expectations that the Fed will unveil another large rate increase when its meeting ends on Wednesday.

Crude oil prices were steady, but euro zone bond yields hit new multi-year highs as German producer prices rose in August at their strongest rate since records began, stoking worries about even higher inflation.

U.S. stock futures were down about 0.35%.

The STOXX index of 600 European companies gave up initial gains to ease 0.5%, compounding a 16% slide for the year as fallout from war in Ukraine and rising inflation and borrowing costs fuel recession fears.

Sweden's central bank hiked rates by a greater than expected full percentage point on Tuesday and warned of more to come, a stark reminder for investors that tackling inflation remains a work in progress for many central banks.

Hikes from the Bank of England and Swiss central bank are expected on Thursday, piling more pressure on stock markets.

"Tighter monetary policy around the world will increase the headwinds for risk assets - after all, central bankers are deliberately trying to slow aggregate demand," ING bank said.

Markets are priced for U.S. rates to climb as high as 4.5% by early 2023, compared with the Fed's current 2.25%-2.5% policy rate range.

Luca Paolini, chief strategist at Pictet Asset Management, said the U.S. central bank would likely ease the pace of hikes going into next year.

"The market, in a way, is probably expecting a peak in rates," Paolini said, adding that market focus would then switch to how higher rates were affecting economies and company earnings.

"We haven't seen it yet fully, I believe, as significant downgrade in earnings which I think will come. The downside for bonds is limited," Paolini said.

Inverted yield curves or long-term interest rates below short-term rates, were also a red flag historically to buying shares, he added.

On a more positive note for stocks, the books for Volkswagen's hotly anticipated initial public offering of Porsche AG on Sept. 29 are covered multiple times over.

BOND YIELDS RISE

China's central bank kept its benchmark lending rates unchanged at a monthly fixing on Tuesday, as expected.

The other exception is the Bank of Japan, also due to meet this week and which has shown no sign of abandoning its ultra-easy yield curve policy despite a drastic slide in the yen and inflation hitting its fastest pace in eight years.

"Just because nobody expects anything coming from Japan, the central bank there could be the more interesting one this week because any hint they are going to change anything could have massive implications for the yen," Paolini said.

Share trading resumed in Japan on Tuesday after a national holiday. The Nikkei advanced 0.4%, with technology stocks largely driving the climb.

China's blue-chip CSI300 index was 0.12% higher while Hong Kong's Hang Seng index rose 1.2%.

Sentiment in Hong Kong was also boosted after the government flagged that change to its COVID-19 hotel quarantine policy for all arrivals was coming soon, saying it wanted an "orderly opening-up".

Higher interest rates and continued high inflation have caused a sell-off in government bonds.

The yield on benchmark 10-year Treasury notes was at 3.5493%.

The two-year U.S. yield, a barometer of future inflation expectations, traded at 3.9664% after climbing to its highest since November 2007.

Higher U.S. Treasury yields have helped strengthen the dollar and made gold less attractive.

The dollar index, which measures the currency against six counterparts, was 0.31% stronger at 109.890.

Spot gold was traded at $1,667 per ounce, down 0.5%

U.S. crude was flat at $85.80 a barrel. Brent crude was also little changed at $92.09 per barrel.

(Reporting by Huw Jones, additional reporting by Julie Zhu; Editing by Edwina Gibbs and Alison Williams)


ę Reuters 2022
Stocks mentioned in the article
ChangeLast1st jan.
AUSTRALIAN DOLLAR / BRITISH POUND (AUD/GBP) 0.05% 0.55409 Delayed Quote.2.98%
AUSTRALIAN DOLLAR / JAPANESE YEN (AUD/JPY) 0.45% 92.043 Delayed Quote.9.16%
AUSTRALIAN DOLLAR / US DOLLAR (AUD/USD) -0.17% 0.6799 Delayed Quote.-6.47%
BRENT OIL 0.78% 87.54 Delayed Quote.11.95%
BRITISH POUND / JAPANESE YEN (GBP/JPY) 0.40% 166 Delayed Quote.6.01%
BRITISH POUND / US DOLLAR (GBP/USD) -0.23% 1.22666 Delayed Quote.-9.16%
CANADIAN DOLLAR / BRITISH POUND (CAD/GBP) 0.40% 0.607327 Delayed Quote.3.28%
CANADIAN DOLLAR / JAPANESE YEN (CAD/JPY) 0.81% 100.81 Delayed Quote.9.48%
CANADIAN DOLLAR / US DOLLAR (CAD/USD) 0.17% 0.74477 Delayed Quote.-6.18%
DOW JONES FXCM DOLLAR INDEX 0.04% 12892.22 Real-time Quote.5.95%
EURO / BRITISH POUND (EUR/GBP) 0.35% 0.8605 Delayed Quote.2.07%
EURO / JAPANESE YEN (EUR/JPY) 0.75% 142.852 Delayed Quote.8.20%
EURO / US DOLLAR (EUR/USD) 0.11% 1.05547 Delayed Quote.-7.30%
GERMANY 10Y CASH 2.12% 1.824 Delayed Quote.1,099.62%
INDIAN RUPEE / BRITISH POUND (INR/GBP) -0.40% 0.009981 Delayed Quote.0.82%
INDIAN RUPEE / JAPANESE YEN (INR/JPY) 0.22% 1.654561 Delayed Quote.6.83%
INDIAN RUPEE / US DOLLAR (INR/USD) -0.51% 0.012221 Delayed Quote.-8.43%
ING GROEP N.V. 0.49% 11.47 Real-time Quote.-6.75%
JAPANESE YEN / SWISS FRANC (JPY/CHF) -0.86% 0.6905 Delayed Quote.-12.11%
NEW ZEALAND DOLLAR / JAPANESE YEN (NZD/JPY) 0.60% 86.641 Delayed Quote.9.40%
NEW ZEALAND DOLLAR / US DOLLAR (NZD/USD) -0.08% 0.64013 Delayed Quote.-6.26%
NIKKEI 225 0.15% 27820.4 Real-time Quote.-3.52%
PORSCHE AG -0.70% 106.9 Delayed Quote.0.00%
S&P GSCI CRUDE OIL INDEX 2.93% 451.2768 Real-time Quote.6.34%
US DOLLAR / BRITISH POUND (USD/GBP) 0.24% 0.815275 Delayed Quote.10.08%
US DOLLAR / JAPANESE YEN (USD/JPY) 0.64% 135.35 Delayed Quote.16.70%
VOLKSWAGEN AG 1.18% 140.64 Delayed Quote.-21.67%
WTI 1.09% 82.014 Delayed Quote.6.45%
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Analyst Recommendations on VOLKSWAGEN AG
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Financials
Sales 2022 279 B 292 B 292 B
Net income 2022 16 858 M 17 677 M 17 677 M
Net cash 2022 37 783 M 39 617 M 39 617 M
P/E ratio 2022 4,19x
Yield 2022 6,33%
Capitalization 82 948 M 86 975 M 86 975 M
EV / Sales 2022 0,16x
EV / Sales 2023 0,15x
Nbr of Employees 645 868
Free-Float 56,8%
Chart VOLKSWAGEN AG
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Technical analysis trends VOLKSWAGEN AG
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Mean consensus OUTPERFORM
Number of Analysts 21
Last Close Price 139,02 €
Average target price 189,19 €
Spread / Average Target 36,1%
EPS Revisions
Managers and Directors
Oliver Ingo Blume Chairman-Management Board
Arno Antlitz Director-Controlling & Accounting
Hans Dieter P÷tsch Member-Management Board
Thomas Schmall-von Westerholt Head-Technology
Kurt Michels Chief Compliance Officer
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