U.S. consumer prices rise less than expected

Good news came from the U.S. last week, where consumer prices rose less than expected. The MDAX company Talanx impressed with strong figures, leading to a significant rise in its stock price.

The German economy continues to struggle: The ZEW Economic Sentiment index fell by 22.6 points in August compared to the previous month, reaching only 19.2 points. The last time sentiment deteriorated so drastically was in July 2022. The barometer for the current situation worsened by 8.4 points to -77.3 points.

Despite the negative sentiment, the stock market was unaffected last week. The DAX improved by 3.38 % to 18,325 points, while the MDAX rose by 1.98 % to 24,810 points. The Dow Jones exited the week up 2.94 % at 40,677 points, and the Nasdaq 100 gained 5.40 %, closing at 19,509 points. Tailwinds came from the United States.

USA: inflation unexpectedly decreased

As reported by the U.S. Department of Labor on Wednesday in Washington, price increases in the U.S. unexpectedly slowed down in July. Compared to the same month last year, consumer prices rose by 2.9 %, bringing the inflation rate to its lowest level since March 2021. Experts had predicted a rate of 3.0 % – the same as in June. Core inflation, excluding prices for energy and food, fell from 3.3 % in the previous month to 3.2 % in July. This increases the likelihood of an early interest rate.

Good news also came from the U.S. economy: Retail sales in July exceeded expectations. Revenues increased by 1.0 % compared to the previous month, as reported by the Department of Commerce on Thursday. Economists had expected an average increase of only 0.4 %. However, the picture is somewhat clouded by a 0.2 % decline in June, where stagnation had initially been reported.

Talanx stock rises after results

Despite some challenges facing the German economy, some companies are still delivering strong results, including the insurance company Talanx. Both its reinsurance subsidiary Hannover Rück and primary insurer HDI performed well. Insurance revenue increased by 13 % compared to the previous year to €23.6 billion, while group earnings rose by 32% to €1.09 billion. Operating profit (EBIT) increased by 28% to €2.5 billion.

„Our focused strategy continues to pay off. We are achieving strong and profitable growth – both organic and inorganic,“ said Torsten Leue, CEO of Talanx AG. „Despite higher major claims in the second quarter, we have buffers for the hurricane season in the third quarter, which is expected to be exceptionally strong according to expert forecasts. Therefore, we are very confident that we will significantly exceed our earnings target of more than €1.7 billion for 2024 and will review our forecast after the third quarter.“

The Talanx stock gained 15.0 3% over the week. Similarly, shares of the pharmaceutical and agrochemical giant Bayer saw a 12.43 % increase. After the latest quarterly figures, the stock initially declined but a step forward in its glyphosate lawsuit propelled the stock forward.

Outlook

Next week, YOC AG will present its figures. The Adtech company has impressed in recent years with strong revenue growth. Financial reports from the U.S. include those from the discount retailer Dollar Tree and the software company Workday.