The ECB has raised interest rates, and now the decisions of numerous other central banks are on the agenda. Of particular interest: the Fed decision on Wednesday.
18 September 2023. FRANKFURT (Frankfurt Stock Exchange). After the ECB's further interest rate hike last week, the focus now turns to the US. There, the next U.S. Federal Reserve meeting will take place this Wednesday. "Unlike the ECB, the Fed will probably keep quiet and leave the key interest rate corridor at 5.25 to 5.50 percent," says Jörg Krämer, chief economist at Commerzbank. That's because inflation and growth are on the paths the Fed wants, he says. "In the not too distant future, even interest rate cuts are likely to be on the agenda."
In addition to the Fed, however, the Bank of England and the central banks of Switzerland, Sweden, Norway and Japan are also deciding on the key interest rate this week. In the expectation that the interest rate summit is now reached, the DAX had taken course to 16,000 points last week. At the close of trading on Friday, however, it was again only 15,894 points. On the U.S. stock exchanges, the market-wide S&P 500 lost 1.22 percent to 4,450 points, the Nasdaq 100 1.75 percent to 15,202 points. On Monday morning, the DAX stands at x points.
"Exceptionally moderate valuation of German equities"
Helaba sees good opportunities for a year-end spurt on the German stock market. "From a fundamental perspective, the strongest argument in favor of German equities is their decidedly moderate valuation," explains analyst Markus Reinwand. Based on key ratios such as the P/E ratio, the KBV or the price/cash flow ratio, the fair DAX value is currently around 17,500 points. The classic seasonal pattern also speaks in favor of price gains. With regard to the economy, there are still many question marks. However, experience shows that these phases also offer the greatest opportunities for returns. "Because only those who are prepared to take risks and have the right nose will enjoy a premium."
Reinwand
US equities: more expensive, but more interesting?
Jens Herdack of Weber Bank, on the other hand, sees U.S. equities at an advantage. "Estimates currently see the U.S. economy growing by a solid 2 percent year-on-year. For Europe, on the other hand, no one doubts the further path into recession," explains the portfolio manager. In line with the economy, the U.S. equity market is outperforming its counterparts in Europe and emerging markets, he adds. "It remains significantly more expensively valued, but it offers access to companies operating in a much more favorable economic environment."
Fulminant arm IPO
The biggest U.S. IPO of the year so far was a huge success. The new shares of chip designer Arm were not only oversubscribed many times over, the price immediately rose from $51 to more than $63 on the first day of trading. The shares were included on the Frankfurt Stock Exchange on the same day and can be traded there since then (US0420682058).
Details of the Schott Pharma IPO published
A major IPO is also planned in Germany: 23 percent of the Mainz-based glass packaging manufacturer Schott Pharma is to be floated on the stock market at the end of September. For this, 34.6 million shares will be offered from tomorrow, Tuesday, to September 27 in a range of 24.50 to 28.50 euros. The stock market debut is planned for one day later.
Important economic and business dates of the week
Monday, September 18
Selection indices: The index adjustments announced on September 6 take effect. The DAX remains unchanged. In the MDAX United Internet replaces Krones and makes way for thyssenkrupp nucera in the SDAX. IONOS replaces Basler in the SDAX. In addition, Energiekontor joins the TecDAX for Eckert & Ziegler.
Wednesday, September 20
8:00 p.m. USA: Interest rate decision by the U.S. Federal Reserve. The Federal Reserve is expected to leave the key interest rate band at 5.25 to 5.5 percent, as Deutsche Bank explains. Due to the recent resurgence in inflation and robust retail sales, however, the monetary guardians would probably indicate a possible further rate hike in November and a longer-term increased interest rate level.
Thursday, September 21
Interest rate decisions Switzerland, Sweden, Norway.
1 p.m. United Kingdom: Interest rate decision by the Bank of England. There is much to be said for a further, final interest rate step, says asset manager DWS. There are clear signs of an economic slowdown, and the housing market has been weakening for some time. However, the restrictive monetary policy has so far had little impact on wage developments.
Friday, September 22
Japan: Interest rate decision by the Bank of Japan. According to Robert Halver of Baader Bank, there is no threat of a radical break with the fundamentally ultra-loose monetary policy of the Japanese central bank. With a view to over-indebtedness and aging in Japan, its hands are tied.
11:00. Eurozone: September Purchasing Managers' Index. The European economy is in a weak phase, as DekaBank points out. Among the significant negative factors were the ECB's restrictive monetary policy and restrained export demand from abroad. No improvement is in sight for the third quarter, it said.
By: Anna-Maria Borse, 18 September 2023, © Deutsche Börse AG.
Anna-Maria Borse is a finance and economics editor specializing in financial markets/stock markets and economic topics.
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