After yesterday’s slump, many investors are likely to be inspired by the reversal on Wall Street and buy shares again: Experts expect solid price gains.
According to the calculations of banks and brokers, the DAX should increase by more than one percent to around 15,180 points at the start of trading. In view of the forthcoming interest rate decision by the US Federal Reserve (Fed) and the worsening of the Ukraine crisis, investors pressed the sell button yesterday.
The DAX slipped below the psychologically important mark of 15,000 points for the first time since October 2021 and ended trading 3.8 percent weaker at 15,011.13 points. It posted its biggest one-day loss since late November, when the emergence of the omicron variant of the coronavirus rattled stock markets. The indices also fell sharply on the other European trading venues. Moscow’s leading index fell by almost six percent.
Dramatic mood swing at the Dow Jones
At the start of trading, investors should be able to understand the further course development in the USA. After a memorable day, the Dow Jones, which lost 1115 points in the meantime, closed 0.2 percent higher at the end. The technology-heavy Nasdaq, which had initially dropped by a hefty five percent, was up 0.6 percent at the close of trading. The broader S&P 500 put in a similarly rapid final spurt. The Dow ended up at 34,364 points, the Nasdaq at 13,855 and the S&P 500 at 4410 points.
“I wouldn’t be surprised if today was the bottom for the major indices,” said Sam Stovall, investment strategist at CFRA Research in New York. Many investors would probably have expected a very restrictive stance from the US Federal Reserve in the forthcoming interest rate decision.
Investors will find out tomorrow whether this is the case: In view of the high inflation, the Fed will be discussing an increase in key interest rates from today. Observers are expecting information from the Fed’s announcement on Wednesday about how often and by how much interest rates could be raised this year.
In Asia, the Japanese Nikkei index had temporarily fallen by more than two percent to its lowest level since August 20, 2021. It closed with a discount of 1.7 percent to 27131.34 points.
Important economic data are also due during the course of the day: At 10 a.m. in Germany, the usually much-noticed ifo index is published. At 4 p.m. US consumer confidence data is on the agenda.
Provisions for legal cases are on Credit Suisse
The major Swiss bank Credit Suisse expects a roughly balanced pre-tax result in the fourth quarter before deducting the previously announced goodwill impairment of around CHF 1.6 billion. Reported profit is negatively impacted by significant litigation provisions of CHF 500 million. This is partially offset by gains from real estate sales of CHF 225 million.
Strong quarter for IBM
Computer manufacturer IBM exceeded expectations for the fourth quarter. In the consulting business, sales increased by 13.1 percent to $4.75 billion. The cloud division reported a 16 percent increase in sales to $6.2 billion. Overall, revenue rose 6.5 percent to $16.7 billion. On average, analysts had only expected just under 16 billion. Net income increased by almost a billion to $2.33 billion.