market report
Status: 08.09.2022 07:39 a.m
Today’s trading day will be dominated by the interest rate decision by the European Central Bank (ECB). At the moment, investors are optimistic.
Before the key rate decision by the European Central Bank (ECB), there are signs of further stabilization in the DAX. The broker IG appraised the leading German index about half a percent higher at 12,985 points before the opening. It is thus further away from its interim low of 12,603 points from the previous week. Yesterday, the DAX gained 0.4 percent to 12,916 points.
What is the ECB doing?
A majority of economists expect the ECB to raise interest rates by a historic 0.75 percentage points on Thursday. This would be the strongest rate hike since the introduction of the euro as book money in 1999. Experts point to the extremely high inflation as the reason.
Monetary policy is currently being complicated by the weakening economy. In particular, the sharp rise in natural gas prices, but also ongoing disruptions in the supply chain, are having a negative impact on economic development. Rising key interest rates could also dampen economic development.
“The situation in which the ECB finds itself is increasingly delicate,” said Gergely Majoros, investment expert at asset manager Carmignac. “It has to deal with inflation in an environment where there is a high risk of a recession in the euro zone.” The ECB will announce the interest rate decision at 2:15 p.m., the subsequent press conference will begin at 2:45 p.m.
USA with strong guidelines
The specifications from the USA are strong: the Dow Jones closed 1.4 percent higher at 31,581 points yesterday. The tech-heavy Nasdaq advanced 2.1 percent to 11,791 points. The broad S&P 500 gained 1.8 percent to 3979 points. In the previous weeks they had lost a total of around ten percent.
The economic report from the US Federal Reserve was weak yesterday: In the USA, the economy was on the whole in July and August. However, given the very high rate of inflation, there are signs that the increase is slowing down. Investors are therefore hoping for a less consistent rate hike policy – the stock markets would benefit from this.
Exchange rate gains in Japan
The signs are mixed in Asia, with investors’ buying mood being dampened by uncertainty about the long-term effects of China’s zero-corona policy. The Nikkei index, which comprises 225 stocks, was 2.1 percent higher at 27,992 points. The broader Topix index rose 2 percent to 1,953 points. The Shanghai stock exchange was down 0.1 percent. The index of the most important companies in Shanghai and Shenzhen stagnated.
United Airlines raises forecast
The US airline United Airlines has increased its forecast for the third quarter due to high demand. In terms of sales in the operating business, the group is now expecting an increase of twelve percent compared to the third quarter of 2019, i.e. before the outbreak of the corona pandemic. The company had previously expected an increase of eleven percent. The margin is now expected to be 10.5 percent instead of the previous 10 percent. The reason for the somewhat better prospects is strong demand during the holiday season, and business is also going well in September.