The DAX is starting the new week with gains. The focus will be on the ECB meeting on Thursday and the balance sheet season. Meanwhile, chart technicians see a good chance that the DAX will soon climb to new all-time highs.
22 January 2024. FRANKFURT (Börse Frankfurt). Good conditions from the USA and Asia are causing prices on the German stock market to rise this morning. Shortly after the start of trading, the DAX stood at around 16,680 points, 0.8% above its closing level on Friday. The leading German index ended the previous week with a mini gain of 0.1 percent at 16,555 points. In the USA, the Nasdaq 100 (+2.0 percent on Friday) and the S&P 500 (+1.2 percent) rose to new record highs at the end of the week. In Japan, the positive mood continued this morning with the Nikkei 225 rising by 1.6%.
The balance sheet season is picking up speed
The upswing is currently being supported above all by the ongoing AI euphoria at many companies. Against this backdrop, the focus this week is increasingly on the figures and forecasts of companies such as ASML, Intel, Microsoft and SAP. With regard to the market as a whole, however, the analysts at LBBW warn that the willingness to buy in the S&P 500 has fallen significantly, which generally leads to a significant drop in index levels.
Seit dem Jahreswechsel hätten sich Anleger „markant von US-Aktien getrennt“. Weil dabei aber noch keine rekordtiefen Niveaus erreicht wurden, spreche einiges dafür, „dass sich dieser Prozess noch fortsetzen könnte“. Die LBBW rechnet daher für den S&P 500 per Ende März mit einem Rückgang auf 4.500 Punkte. Zum Jahresende hin liegt das Kursziel dann aber wieder bei 4.900 Punkten. Beim DAX wird analog dazu erst ein Rücksetzer auf 16.000 Punkte und dann ein Jahresendstand von 18.000 Punkten prognostiziert.
ECB meeting: sentiment killer or non-event?
At the central bank meetings in Japan (Tuesday) and Europe (Thursday), no adjustments to key interest rates are expected for the time being. However, there is still a great deal of tension, especially with regard to the ECB Governing Council meeting. According to LBBW, the main focus will be on the choice of words regarding the timing of an interest rate turnaround and the assessment of inflation risks.
Last week, ECB chief Christine Lagarde classified an initial interest rate cut by the summer as "likely", but criticized the excessive optimism of market participants regarding monetary easing. "A clear rejection of key interest rate measures in the near future could hit market sentiment hard," fear the strategists at Commerzbank. Robert Halver from Baader Bank, on the other hand, assumes that this week's ECB meeting "will be a non-event".
In addition to interest rates, the development of the economy is always an important influencing factor for the stock markets. Especially as there are also correlations here. "The recent positive economic data has called into question the need for early and massive monetary easing," emphasize the economists at Helaba, for example. Commerzbank, on the other hand, states that the good US macro data is providing the market with some support, while the pricing out of the exaggeratedly strong interest rate euphoria of the fourth quarter is tending to have a negative impact.
Technical picture gives hope
In this difficult situation, a sober look at the charts can possibly provide orientation. And things are looking good. In view of the new record highs, the strategists at Wellenreiter Invest initially expect the US markets to see follow-on buying and a continuation of the upward trend. And according to Jörg Scherer, technical analyst at HSBC, "a constructive way out" of the current consolidation phase could possibly also open up for the DAX. The consolidation is "increasingly taking on the characteristics of a corrective flag". If the index were to overcome the upper limit of the flag, currently at 16,779 points, this would also pave the way to new all-time highs. Until then, there are still around 100 points to go.
Important economic and business events of the week
Monday, January 22
4 pm. USA: Index of leading indicators. A drop of 0.3 percent is expected for December compared to the previous month
Tuesday, January 23
Japan: BoJ interest rate decision. Deutsche Bank assumes that the Japanese central bank will stick to its current monetary policy course this time, but will then abandon its negative interest rate policy in April.
4 pm. Eurozone: Consumer confidence. The mood among consumers is likely to remain poor. After a value of minus 15.0 in December, Helaba expects the indicator to improve only minimally to minus 14.5 in January.
Wednesday, January 24
10.00 am. Eurozone: Purchasing Managers' Indices. According to Commerzbank, the PMI for services is likely to remain at best at the current level (48.8) and thus remain below the growth threshold for the sixth time in a row. A slight recovery at best is also expected for the manufacturing sector (44.4), which is even more clearly stuck in recession mode.
Thursday, January 25
10.00 am. Germany: ifo Business Climate. A similar picture is emerging for the German ifo index, where the consensus expects a slight increase from 86.4 to 86.9. Expectations are still likely to be worse than the assessment of the current situation.
2.15 pm. Eurozone: ECB interest rate decision. The press conference with ECB President Christine Lagarde is eagerly awaited.
2.30 pm. USA: Initial jobless claims.
2.30 pm. USA: GDP Q4. Both the US economists at Deutsche Bank and the strategists at Commerzbank expect real GDP growth of +2.0 percent annualized for the fourth quarter after +4.9 percent in Q3.
Friday, January 26
2.30 pm. USA: Deflator and core deflator private consumption. Deutsche Bank expects income and consumption growth of +0.3 percent each and core PCE growth of +0.1 percent for this inflation indicator, which is closely monitored by the US Federal Reserve.
By Thomas Koch, 22 January 2024 © Deutsche Börse AG
Thomas Koch is a CEFA investment analyst, investment specialist for structured products and a certified certificate consultant. He has been a freelance journalist covering events on the capital markets since the beginning of 2006.
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