THE MOST IMPORTANT NEWS OF THE LAST WEEK 3.3.2022

Strong demand for Lufthansa

Deutsche Lufthansa airline shares hit a three-year high at the end of the week in Frankfurt. The reason for this is higher demand in the European tourism sector. The company boasts a big turnaround to profit for 2022, beating both its own and market expectations. The airline's result swung to a profit of €791m from a loss of €2.19bn in 2021. Lufthansa shares rose more than 6% in the wake, the highest since the pandemic began in early 2020, as the group expects 2023 to be a strong year.*

The performance of Deutsche Lufthansa shares over the past 5 years. (Source: Investing)

Lower profits in IT

Personal computer sales leader Dell has reported a drop in demand from pandemic highs in the enterprise and consumer sectors. Worse demand for PCs was offset by strong demand for storage and servers. Still, Dell Technologies posted a forecast for current-quarter sales and earnings below Wall Street estimates. Consequently, the stock value weakened. The computer giant forecast first-quarter revenue to fall 17% to 21%.[1]

Gold started to thrive

The prospect of an eventual suspension of rate hikes has emerged in the markets. This news helped the metals markets recover from recent losses. Gold values began to rise and were set for the first weekly gain in five years. This is due to recent comments from Fed officials that helped clarify the direction of monetary policy this year. They warned of possible further interest rate hikes but also mentioned moderating inflation and economic growth.

Lower investment in Europe

Some multinationals have started to reassess their plans to invest their funds in Europe. This is due to the decision by US President Biden to introduce the Inflation Reduction Act, or the IRA, which includes record spending of USD 369 billion on climate and energy policy. Environmental subsidies to companies are causing competition problems for European companies. The Tesla car company has also recently announced a rethink of its strategy regarding investments in Europe in the context of Biden's subsidies.

* Past performance is no guarantee of future results.

[1] Forward-looking statements are based on assumptions and current expectations, which may be inaccurate, or based on the current economic environment which is subject to change. Such statements are not guaranteeing of future performance. They involve risks and other uncertainties which are difficult to predict. Results could differ materially from those expressed or implied in any forward-looking statements.