market report
In the morning, the DAX remained close to its record high set yesterday. But today’s meeting of the US Federal Reserve urges caution. Investors are waiting for clues as to when the Fed will cut interest rates in 2024.
Despite positive guidance from Wall Street, the DAX is likely to start trading cautiously in the middle of the week. Investors could hold back on making new commitments ahead of the US Federal Reserve’s interest rate decision this evening. The broker IG currently values the 40 German standard stocks a few points above their closing price of 16,792 points yesterday.
The day before, the German stock market barometer set a new record at 16,837 points – once again, as the DAX had already rushed from record high to record high in the previous days. Even if the prices on the German stock market have long been considered “hot” and “overbought”, there were still buyers at the ready who snapped up even the slightest price declines.
Behind this is also the fear of many (institutional) investors (“fear of missing out”, FOMO) of completely missing the rally that has been going on since the end of October and of having a poor performance at the end of the year compared to the market that was rushing away.
Some restraint may be in order today. Finally, the US Federal Reserve’s last interest rate decision this year is on the agenda today. The Fed will leave interest rates untouched, that much is certain. The outlook is more exciting: Investors are hoping for clues as to when the Fed will cut interest rates next year.
Because it is the hope of interest rate cuts soon in the new year that has recently driven prices up so sharply. Investors are betting that both the Fed and the European Central Bank (ECB) will initiate a turnaround in interest rates as early as spring. The potential for disappointment following the Fed meeting today and the ECB meeting tomorrow is correspondingly high if the central bankers do not meet the high market expectations.
Meanwhile, positive guidelines for DAX trading are coming from Wall Street: The Dow Jones Industrial has marked another high since the beginning of 2022, and the record high of just over 36,950 points is now within reach. The Nasdaq 100 also closed at a new high in almost two years and is now just two and a half percent below its peak reached at the end of November 2021.
The US leading index Dow Jones ultimately gained 0.5 percent to 36,577 points. The technology-heavy Nasdaq advanced 0.7 percent to 14,533 points and the broad S&P 500 rose 0.5 percent to 4,643 points.
The Nikkei index, which includes 225 stocks, followed Wall Street into positive territory in the morning. At the close of trading in Tokyo, the Japanese leading index was 0.3 percent higher at 32,926 points. “Investors wanted to buy more to boost the Nikkei, but caution over the Federal Reserve’s decision dampened appetite,” said Shigetoshi Kamada of Tachibana Securities. The Shanghai stock exchange is currently down 0.9 percent.
The price of gold falls further in the morning. In the morning, a troy ounce of gold will cost $1,978 – a loss of 0.2 percent. Some experts had described the recent rise to a new record high at $2,135 as a “false breakout”. The euro lost 0.1 percent to $1.0789 in early foreign exchange trading.
Oil prices remain under pressure in the middle of the week. The price for a barrel (159 liters) of North Sea Brent fell 0.3 percent to $72.97. The day before, both Brent and the US light oil WTI had fallen by around 3.5 percent to $73.37 and $68.73 per barrel respectively.
After major companies withdrew from the Internet platform Advertising revenue from businessman Elon Musk’s platform would probably fall to around $2.5 billion this year. In Twitter’s last four quarters as a listed company, covering the period between the second half of 2021 and the first half of 2022, it totaled $4.7 billion, according to LSEG data.