market report
Investors are likely to act cautiously ahead of the ECB’s interest rate decision. Experts do not expect an interest rate cut, but market participants are hoping for indications about future monetary policy.
Before the start of XETRA trading, the broker IG estimates the DAX to be down 0.2 percent to 16,859 points. Under the influence of strong quarterly balance sheets from some technology companies, the DAX rose significantly again yesterday. The leading German index closed with an increase of 1.6 percent at 16,890 points.
The positive mood was driven by the reporting season with positive news, especially from the technology sector. On the one hand, these came from the USA; here, SAP created a good mood with a strong quarterly balance and a record high.
Ulrich Stephan, chief investment strategist for private and corporate clients at Deutsche Bank, speaks of a good environment for technology companies: “Growth remains solid and could receive new impetus from artificial intelligence, while efforts to increase capital efficiency bear fruit and increase profitability.”
Today, investors are likely to be primarily concerned with the ECB’s interest rate decision, which will be announced at 2:15 p.m. Most banking economists expect key interest rates to remain stable when the ECB Governing Council meets for its regular discussions. It would be the third time in a row that the central bank has stuck to its course. It had previously raised key interest rates quickly and significantly to 4.5 percent due to the sharp rise in inflation.
“The message from the ECB since the Council meeting in December has been: no reduction in the first quarter, the door open in the second quarter,” says a monetary policy outlook from Deutsche Bank. Experts consider it crucial that the central bank first wants to get an idea of the upcoming wage negotiations. And these mostly take place in the first quarter.
The high expectations of rapid and multiple interest rate cuts this year were the reason for the stock market rally at the end of 2023, which then stalled in January because the expectations turned out to be somewhat exaggerated.
On the US stock market, the strong balance sheets of some tech companies have brought the US S&P 500 index to a new record close. The stock market barometer advanced by 0.1 percent to 4,869 points yesterday. This was the fourth high in a row at the end of trading. The Dow Jones index of standard stocks, however, was 0.3 percent weaker at 37,806 points. The index on the Nasdaq technology exchange climbed 0.4 percent to 15,482.
In Japan, the Nikkei index closed almost unchanged at 36,236 points. The recent Nikkei rally was supported by expectations that the Japanese central bank would maintain its ultra-loose policies, but that support has now disappeared,” said Shuutarou Yasuda, an analyst at Tokai Tokyo Research Institute.
Price cuts and purchasing incentives have ruined the car manufacturer Tesla’s balance sheet. The electric car pioneer also expects sales growth to slow down this year. The group reported a sales increase of three percent to $25.2 billion for the fourth quarter on Wednesday after the market closed. But that was the lowest growth in more than three years and was below experts’ estimates of 25.6 billion.
The Boeing 737-9 Max aircraft, which were shut down after a high-profile incident, will soon be allowed to take to the air again. The US Federal Aviation Administration yesterday approved the procedure for its ordered inspections of the machines. According to the airlines concerned, such a test takes several hours per aircraft.
The impending complete takeover of the German subsidiary of the Spanish telecommunications group Telefonica also has consequences for its index listing. As of today, Telefonica Deutschland will no longer be included in the MDAX and TecDAX, as the index provider Stoxx announced. With the expiration of the takeover offer, the stake in the subsidiary increased to a good 93 percent. This means that Telefonica Deutschland no longer meets the condition of a free float of at least ten percent necessary for listing in the indices.
To this end, the Luxembourg industrial recycler Befesa is moving up the MDAX index of medium-sized stocks. The office furniture retailer Takkt takes over its place in the SDAX.