It's "central bank week" again – interest rate decisions in the US, UK, Japan and Switzerland are on the agenda. Interest rate cuts are not expected, not yet. The mood remains good.
18. März 2024. FRANKFURT (Börse Frankfurt). Even if the interest rate cuts do not come as quickly as hoped, they will come - that remains the market's assessment. There are no major setbacks. "Investor confidence seems to remain high, setbacks are always used to enter the market," notes Ralf Umlauf from Helaba. The DAX stands at x points on Monday morning. On Friday, it closed at 17,937 points, after reaching a new all-time high of 18,039.10 points on Thursday. The New York stock exchanges ended the week with losses. However, positive signals are coming from Asia today.
New impetus is expected this week with regard to future monetary policy. This is because numerous interest rate decisions are due in the "week of the central banks": in the USA, the UK, Japan and Switzerland, for example. Helaba remains confident for the new week: "The upward trend for the DAX could continue, especially as we expect the first cautious signs of spring from sentiment indicators such as the ifo and ZEW indices this week," explains Umlauf's colleague Claudia Windt.
"DAX may well continue its upward trend"
Thorsten Weinelt from Commerzbank does not expect any major jumps for the time being: "After the US price data, which exceeded expectations, put a slight damper on the last record run on the stock markets, investors are likely to act somewhat more cautiously for the time being," says the chief investment strategist. In the run-up to the important Fed meeting in the middle of the week, the indices are therefore more likely to remain at their current levels.
However, the bank admits that it has been too pessimistic about the DAX so far. "We underestimated the strength of the US economy and the fantasy surrounding artificial intelligence," explains analyst Andreas Hürkamp. In this environment, the DAX could well continue its upward trend. "However, some risk factors are likely to regularly slow down the German stock market, especially in the seasonally weaker phase in the second and third quarters."
Opportunities beyond the "Magnificent Seven"
Karen Ward, European Chief Strategist at JP Morgan Asset Management, currently sees opportunities on the stock market above all beyond the "Magnificent Seven", i.e. the major US tech stocks. It is very difficult to find the ultimate winner in technology stocks in particular. She recommends stock segments where valuations are not yet too high. She sees opportunities especially in European equities. "European equities appear cheap overall and could surprise positively," explains Ward.
Important economic and business events of the week
Monday, 18 March
The changes to the DAX family decided on March 6 come into force. The DAX itself remains unchanged. Morphosys and Bilfinger are promoted to the MDAX, while Vitesco is relegated to the SDAX. Rational also leaves the MDAX and leaves the DAX family altogether for the time being. Financial services provider MLP is new to the SDAX. In addition, the cap for the DAX index family will be raised from 10 to 15 percent. More information on
3.00 am. China: Retail sales/industrial production January/February. The data already published point to a further recovery in the world's second largest economy.
Tuesday, 19 March
Japan: Interest rate decision by the Bank of Japan. According to DekaBank, the central bank could take a historic step and raise key interest rates for the first time since 2007. This would end the phase of negative key interest rates that has lasted since February 2016.
11.00 am. Germany: ZEW Economic Sentiment March. According to Helaba, the similarly constructed sentix economic index is slightly negative. However, the robust stock markets are likely to have a positive effect.
Wednesday, 20 March
19.00 pm. USA: Interest rate decision by the US Federal Reserve. According to DekaBank, the Fed is unlikely to make any major changes to its macroeconomic projections or its statement in this interest rate decision. However, the latest price data for January and February are undesirably high and contradict the planned interest rate turnaround in June.
Thursday, 21 March
9.30 am. Switzerland: Interest rate decision by the Swiss National Bank.
10.00 am. Eurozone: Purchasing Managers' Index March. According to Commerzbank, the surprisingly strong rise in the Purchasing Managers' Index for the services sector in February was not a flash in the pan. The bank expects a further slight increase in March. The index for industry is also likely to have continued its upward trend after the interruption in February.
13.00 pm. Great Britain: Interest rate decision by the Bank of England.
Friday, 22 March
10.00 am. Germany: ifo Business Climate March. According to DekaBank, hopes for improvement will support the ifo business climate. Companies continue to describe the business situation as exceptionally poor.
by: Anna-Maria Borse, 18 March, 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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