US Federal Reserve meeting, growth and inflation data, corporate figures - this week's calendar is jam-packed. While Wall Street is hitting new all-time highs almost every day anyway, the DAX could now follow suit, according to reports.
29 January 2024. FRANKFURT (Börse Frankfurt). The new week is once again dominated by monetary policy. After the ECB meeting last week, it is the US Federal Reserve's turn this week. "The monetary authorities will probably leave the key interest rate unchanged, but will verbally counter market expectations of an imminent rate cut at the March meeting," say the analysts at Deutsche Bank. New signals about the future course of the central bankers are also hoped for from the inflation and growth figures expected this week.
"Last week, equities were strongly betting that the US economy would make a soft landing and that monetary policy could become looser," notes Claudia Windt from Helaba. However, she now fears a setback, as the fundamental environment is still very fragile. "Monetary policy is not yet ready on the inflation side." The sharp rise in the oil price also poses risks. At USD 83.40 for a barrel of Brent crude, it is currently at its highest level since the end of November, mainly due to the tense situation in the Middle East.
The DAX stood at 16.877 points on Monday morning after closing at 16,961 on Friday and 17,003 at its record high in mid-December. On Wall Street, the Dow Jones and S&P 500 reached new highs again on Friday, but then weakened somewhat.
"Euphoria is a warning sign"
As far as corporate profits are concerned, Weber Bank expects a noticeable recovery over the course of the year and therefore considers equities to remain attractive in the medium term. "Both the US labor market and private consumption remain extremely robust and are supporting sales growth," explains Bastian Ernst. In addition, falling commodity prices are providing cost relief. "Nevertheless, the markets are already quite euphoric and equities are correspondingly highly weighted." Equity allocations rose sharply at the end of the year in particular. However, this euphoria is a warning sign. Ernst quotes Warren Buffett: "Be fearful when others are greedy and be greedy when others are fearful". However, interim price setbacks are a good opportunity to buy quality shares due to the good fundamental situation.
"On to new heights"
Chart technicians are currently confident: "The short-term upward trend was broken last week, albeit not yet significantly," says Christian Henke from IG. However, the technical traffic light only turns green above the all-time high. Chart technician Christoph Geyer believes this is within reach: "DAX - breakout successful, on to new highs," he says. The DAX has managed to break out of the trend channel and thus opened up new upward potential. "A new record high should therefore only be a formality." The MACD indicator has just generated a buy signal, which increases the chance of a further rise. However, the seasonality statistics suggest that corrections are always to be expected.
Meanwhile, the reporting season is picking up speed. In the USA, tech giants Microsoft, Alphabet, Apple and Meta are reporting, while in Germany Deutsche Bank and Siemens Healthineers are among those reporting.
Important economic and business events of the week
Monday, January 29
10.00 am. Germany: GDP fourth quarter.
11.00 am. Eurozone: GDP fourth quarter.
Wednesday, January 31
9.55 am. Germany: Unemployment figures for January. After the rise in the seasonally adjusted unemployment rate to 5.9 percent in the previous month, Helaba now expects a sideways movement.
2.00 om. Germany: Consumer prices January. Helaba expects an increase in consumer prices of 0.5 percent compared to December and 3.2 percent compared to the same month last year.
9.00 pm. Interest rate decision US Federal Reserve. The Fed will not change its interest rates, explains Commerzbank. However, it believes that discussions about the duration and pace of balance sheet reduction are possible.
Thursday, February 1
11.00 am. Eurozone: Consumer prices January. Inflation is likely to have fallen to 2.6 percent year-on-year, according to DekaBank.
1.00 pm. Great Britain: Bank of England interest rate decision. The market does not expect any change in key interest rates.
Friday, February 2
2.30 pm. USA: January unemployment figures. According to Deutsche Bank, non-farm payroll growth is likely to have slowed from 216,000 to 180,000 jobs, but this still points to a robust labor market. The unemployment rate is likely to have risen from 3.7 to 3.8 percent.
By Anna-Maria Borse, 29 January 2024, © Deutsche Börse AG
Anna-Maria Borse is a financial and business editor specializing in the financial market/stock exchange and economic topics.
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