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DAX forecast somewhat higher: No risks from the Fed

Market report

As of: 04/28/2021 8:06 AM

Investors are looking forward to the Federal Reserve interest rate meeting today. However, the Federal Reserve is still far from normalizing monetary policy. This is good news for stock exchanges.

According to the calculations of banks and brokers, on Wednesday the DAX should start with a slight increase. On Tuesday, the German benchmark index closed 0.3 percent down at 15,249 points after extremely volatile trading.

Restraint is the order of the day. Quite a few market watchers justify this caution on the part of investors with a significant history on the stock market agenda: Tonight the Fed will announce its monetary policy decisions after its two-day interest rate meeting.

Will everything remain the same?

According to experts, the US Federal Reserve is unlikely to make any fundamental changes to its monetary policy direction at its meeting. In the past few weeks, the Fed has clearly rejected any such speculation in the markets.

Experts expect the benchmark rate to remain in the range of 0 to 0.25 percent. In addition, the monetary authorities surrounding Fed Chairman Jerome Powell are likely to maintain their security purchases of up to $ 120 billion a month.

Danger to stock exchanges and the real economy

In light of the lingering risks from the pandemic, the Fed should see no reasons for starting monetary policy to normalize, according to economists.

The sudden pull of liquidity will not only end rallying equity markets, but it will also trigger a recovery in the real economy.

Monetary policy change only in the summer?

Therefore, market expert Robert Reithfield of Wellenreiter Invest only considers the indices of the bond-buying program to be downgraded in the summer, for example on the occasion of the Jackson Hole meeting in August.

This means that it will likely remain one of the most important price drivers in exchanges for a while.

Wall Street has stopped

The positive reporting season in the US provides the background wind for the stock markets. Tuesday evening after the US market closed, among other things, the parent company of Google Alphabet reported a massive profit increase of 163 per cent to $ 17.9 billion in the fourth quarter.

The tech heavyweight Nasdaq 100 Index futures traded 0.2 percent higher Wednesday morning. In regular trading on Wall Street, the Nasdaq 100 index lost 0.5 percent to 13960 points.

The leading US index, the Dow Jones Industrial Average, closed nearly unchanged at 33,985 points. The S&P 500 rallied across the market, which hit a record high on Monday, immediately at 4,187 meters. In New York, too, it was said that market participants did not want to stray too far from the window before the Fed’s decision.

Nikkei index with earnings

Investors in the Japanese stock market are acting more courageously. The Nikkei index, which has 225 stocks, traded up 0.4 percent shortly before the Tokyo Stock Exchange closed. Some investors have been wary of the pending balance sheet numbers of heavy stock markets like Apple, Facebook and Amazon.

In the Asian foreign exchange market, the euro fell 0.1 percent in early trade to $ 1.2073. At the start of the week, the common European currency briefly broke the $ 1.21 barrier. The price of gold continues to decline in the morning. A troy ounce of gold is currently trading down 0.3 percent at just under $ 1771.

Deutsche Bank with the best quarter in seven years

In the morning, Deutsche Bank switches to focus among the individual stocks in the German stock market. In the first three months of 2021, Germany’s largest financial institution made better profits than it did in seven years. The bottom line was a attributable profit to shareholders of 908 million euros, after losing 43 million euros in the same quarter of the previous year. Once again, investment bankers made the lion’s share of the profit.

Beiersdorf coach takes his hat early

At Hamburg’s consumer goods company Beiersdorf, CEO Stefan De Loecker surprisingly threw it after a good two years. MDAX announced that the Supervisory Board “has cordially agreed to terminate the mandate of its Executive Board on 30 June”. Beiersdorf did not say a reason for the early departure.

The alphabet with a jump in sales and profits

Advertising customers wanting to spend helped Google Alphabet’s parent company jump in sales and profits. In the first quarter, revenues rose 34% to $ 55.3 billion, while profits jumped 163% to $ 17.9 billion. CFO Ruth Porat said the boost reflects the increased activity of consumers online.

The home office trend gives wings to Microsoft

The trend towards the home office, the world’s largest software provider, is making Microsoft look great in the Corona crisis. In the first quarter, sales increased 19% to $ 41.7 billion. The company’s president, Satya Nadella, said that digitization did not slow down even a year after the start of the epidemic. Growth was particularly boosted by Azure’s cloud division, which achieved a 50 percent increase in revenue.