After four weeks of weakness, the mood has turned, with many company reports being too convincing. The further course of the reporting season and, of course, the actions of the central bankers will now be decisive.
29 April 2024. FRANKFURT (Börse Frankfurt). Although there are no longer any hopes of an interest rate cut in the US in the near future, the reporting season shows that most companies are doing well. The phase of weakness on the stock market that has persisted since the end of March therefore appears to be over. The DAX stood at x points on Monday morning after closing at 18,161 points on Friday. Alphabet and Microsoft surprised positively with their quarterly figures on Friday and drove the tech sector upwards.
According to Robert Halver of Baader Bank, the recent price fluctuations are in any case April storms, not severe weather. As long as the US Federal Reserve continues its wait-and-see interest rate policy, higher price fluctuations on the stock markets are to be expected from time to time. “And it will come to a happy end,” he says, referring to the expected interest rate cuts. In addition, the improving global economy is acting as a “fundamental fire accelerator” - especially for European and German cyclical equities. “Finally, the stock markets are taking positive note of the fact that the conflict in the Middle East has not escalated so far,” adds Halver.
Advise against “Sell in May”
Weber Bank also speaks of a temporarily weak phase. “The fundamental data that companies are reporting is too strong,” explains Daniel Schär, Head of Portfolio Management. For 2024 as a whole, the bank continues to expect corporate earnings growth of 9% for international equities, which is above average by historical standards. “We would therefore not follow the old stock market saying ‘Sell in May and go away’.” The bank has done the math: If you had invested 1,000 euros in the MSCI World every year since 1971 at the lowest price for the year, you would have achieved an average return of 7 percent per year. If you had invested at the high for the year, it would have been 6.5 percent - hardly less. “Much more important than speculating on the optimal entry point is therefore the decision to invest regularly and for the long term.” Technicals: Attack on recent top prices
From a technical chart perspective, things are not looking bad either. “After consolidating since the beginning of April, the DAX has not only been able to hold its ground in the latent support zone, explains Christoph Geyer. It has also completed a dynamic upward movement, at least in the short term. “This should mean that the divergent indicators have been worked off.” In the meantime, buy signals have even emerged. “The DAX should therefore seize the opportunity and attack the recent top prices again.”
The highlight of the new week is likely to be the US Federal Reserve meeting on Wednesday. The reporting season also continues. In the USA, companies such as Apple, Amazon, AMD, Super Micro Computer and Eli Lilly will open their books, while Lufthansa, Adidas, Volkswagen, Mercedes and Vonovia will do so in Germany. Important economic and business events of the week
Monday, 29 April 2:00 pm. Germany: Consumer prices April. The trend of falling inflation rates may have come to a halt, says Helaba. Unfavorable base effects and the VAT increase on gas and district heating decided in April argue for an increase in the inflation rate. In addition, oil and petrol prices are no longer having a relieving effect.
Tuesday, 30 April 3.30 am. China: Purchasing Managers' Index April. According to DekaBank, the strong development of green future technologies in particular has supported industrial production in recent months. However, due to existing overcapacities and rather weak demand, this is now probably over. The Purchasing Managers' Index for the manufacturing sector will probably not be able to maintain its high level of the previous month. 10.00 am. Germany: GDP first quarter. According to DekaBank, GDP will probably have increased slightly thanks to the months of January and February. However, since special effects also had an impact here, this development cannot be transferred to the second quarter without further ado. 11.00 am. Eurozone: Consumer prices April. The decline that has been observed for one and a half years seems to be coming to an end, explains Commerzbank and forecasts 2.4 percent, the same as in the previous month. It even sees the risk of a slight increase. On the other hand, the core inflation rate has probably fallen once again, from 2.9 to 2.7 percent. 11.00 am. Eurozone: GDP first quarter. The recovery in the eurozone is in the process of gaining a broad foundation, explains DekaBank. The increase is likely to be supported by all five major economies. Wednesday, 1 May Worldwide: public holiday. Many stock exchanges remain closed. There will also be no trading on Xetra and the Frankfurt Stock Exchange. 8.00 pm. USA: Interest rate decision by the US Federal Reserve. No change in key interest rates is expected. “The decisive factor will be the outcome of the statement and Fed Chairman Powell's comments on the subject of interest rate cuts,” explains Helaba.
Friday, 3 May 2.30 pm. USA: April unemployment rate. Overall, the labor market has held up surprisingly well, says Commerzbank. This is unlikely to have changed much in April. It expects 250,000 new jobs, only slightly less than in March (303,000).
From Anna-Maria Borse, 29 April 2024, © Deutsche Börse AG
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