market report
The disappointed hopes of rapid interest rate cuts by the US Federal Reserve are likely to push the DAX into the red at the start of trading. But perhaps the reporting season will provide new impetus.
The prospect of key interest rates in the USA remaining high for the time being weighed on Wall Street the evening before and is likely to cloud the mood on the German stock market today. The broker IG estimates the DAX 0.3 percent lower to 16,850 points before the Xetra launch.
Yesterday, the leading German index closed 0.4 percent lower at 16,904 points. As was the case the day before, the 17,000 points that the DAX was able to barely surpass for the first time in December were too high a hurdle over the course of the day. Once again, the leading German index turned a few points below.
After DAX trading closed, investors turned their attention to monetary policy. After the US Federal Reserve left the key interest rate unchanged as expected, Fed President Jerome Powell said that a rate cut was unlikely as early as March – a disappointment for many market participants. After all, speculation about early interest rate cuts had recently been a key price driver.
“We have pushed back our forecast for the first rate cut from March to May,” Goldman Sachs analysts wrote in a note to clients. “However, we continue to expect five rate cuts in 2024 and three more in 2025 as we expect core inflation to fall at least a few tenths below the median FOMC forecast this year.”
In addition to monetary policy, the accounting season remains in the focus of investors. After the US stock market closes today, the three tech heavyweights Amazon, Apple and Meta will open their books. The density of company reports is now also increasing in Europe.
This is how Deutsche Bank presented its annual balance sheet in the morning: The bottom line was a net profit of 4.21 billion euros in 2023, a decline of 16 percent compared to 2022. However, analysts had expected significantly less. This means that Deutsche Bank has now made a profit for the fourth year in a row. The pre-tax result increased by two percent to 5.7 billion euros compared to 2022. The board is planning further savings and wants to cut 3,500 jobs.
Powell’s statements caused disillusionment on Wall Street yesterday: The Dow Jones, which had risen to a record just under 38,600 points at the start of trading, ended the day with a loss of 0.8 percent to 38,150 points. This results in an increase of 1.2 percent for the end of January. The market-wide S&P 500 lost 1.6 percent to 4,846 points and the Nasdaq 100 index lost 1.9 percent to 17,137 points.
For both, this means an increase in January of just under two percent each. Last year, the technology-heavy Nasdaq selection index in particular performed far better than the Dow.
Investors in Japan also reacted with disappointment to the failed interest rate hopes. The Nikkei lost 0.8 percent to 36,011 points. The Shanghai stock exchange, on the other hand, rose by 0.2 percent. The index of major companies in Shanghai and Shenzhen gained 0.7 percent.
The medical technology group Siemens Healthineers met analysts’ expectations in the first quarter of 2023/24 and is on track to achieve its goals. Sales rose between October and December on a comparable basis by 5.7 percent to 5.18 billion euros, and adjusted earnings before interest and taxes (EBIT) rose by eight percent to 742 million euros. “We got off to a good start in the new financial year with broad-based growth,” said CEO Bernd Montag. However, the net profit stood at 432 (previous year: 426) million euros.
Contrary to expectations, Adidas was in the black last year and maintained sales. According to preliminary figures, the operating result was 268 (2022: 669) million euros. The Christmas business went better than expected, he said, as did the sell-out of “Yeezy” shoes from the ended partnership with the US rapper “Ye” (Kanye West). Adidas is not writing off the rest of the sneakers, but wants to at least sell them to cover costs in 2024. Calculated in euros, sales fell by five percent to 21.4 billion euros.
The US chip manufacturer Qualcomm increased its sales more than expected in the past quarter. In addition, the global delivery of chips for the top-of-the-line cell phone Galaxy S24 was agreed with Samsung. The group reported a five percent increase in sales to $9.94 billion for its first fiscal quarter (as of December 24, 2023). Analysts on average had expected 9.52 billion. A profit was forecast for the current quarter that was slightly above experts’ estimates.