After heavy losses in the first week of the difficult stock market month of September, hopes are now being pinned on stabilization. There are not many upcoming events, but there are two important ones: the latest US inflation figures and the ECB meeting.
9 September 2024. FRANKFURT (Börse Frankfurt). September once again lived up to its reputation: volatility skyrocketed in the first week of September and shares fell significantly - especially tech stocks. Over the week, the Nasdaq 100 fell by a whopping 6 percent, driven by heavy losses in stocks such as Nvidia and Tesla. “The weakness of the leading US indices virtually jumped across the Atlantic,” reports Deutsche Bank. The DAX was hit the hardest - with a drop of 1.5 percent to 18,301 points on Friday. At the beginning of last week, the index had reached a new all-time high of almost 18,991 points. On Monday morning, the DAX stood at 18,412 points with a plus of more than half a percent.
“There is certainly a sense of uncertainty at the moment,” notes Robert Halver from Baader Bank. Tech stocks are being critically scrutinized for substance. The “soft landing” of the US economy is also being questioned. However, he is convinced that the US interest rate turnaround on September 18 will provide a “breath of fresh air” for the economy. Typically, this will benefit financially dependent stocks, which are still significantly underrepresented.
ECB interest rate cut priced in
This week should see the start of the September interest rate cuts: The ECB is expected to cut rates on Thursday and the US Federal Reserve on the following Wednesday. “Nothing stands in the way of monetary easing,” comments Ralf Umlauf from Helaba with regard to the ECB. Even Bundesbank President Nagel, who is rather reluctant to cut interest rates, has spoken of a wave of inflation that has been overcome. In the USA, the situation is less clear. Although the interest rate cut seems to be a foregone conclusion there too, the question is how big it will be. The US labor market report on Friday did not provide any clear signals in this regard.
“DAX benefits above all from the global economy”
The German economy continues to show no upward momentum, according to DekaBank. “On the contrary, corporate sentiment has even deteriorated again recently,” explains chief economist Ulrich Kater. It will be difficult for the German economy to overcome the combination of economic and structural problems. He attributes the recent record highs of the DAX primarily to the stable global economic conditions. “In combination with only moderate valuations and gradually lower key interest rates, this argues for consolidation at the record levels reached at the beginning of September and limits the downside potential in volatile overall market phases.”
“Only corrective movement in the upward trend”
Christoph Geyer points out that the overall weak weekly performance was concluded with a gap and another very weak performance at the weekend. “What is striking, however, is that overall sales activity has barely picked up,” explains the chart technician. Therefore, it is probably not yet a sell-off situation. Even if the indicators have generated sell signals, we should still talk of a corrective movement on the recent, almost correction-free upward trend. “However, this could still lead to the 18,000 mark. However, an overarching trend reversal should not yet be assumed.”
Important economic and business events of the week
Wednesday, 11 September
2.30 pm. USA: Consumer prices August. Excluding food and energy, the monthly price change is likely to have been slightly higher than in previous months, according to DekaBank. In particular, the previous decline in used car prices probably did not continue in August.
Thursday, 12 September
2.15 pm. Eurozone: ECB interest rate decision. The ECB is expected to cut the deposit rate from 3.75 percent to 3.5 percent. “The updated macroeconomic projections should provide important clues on the future pace of monetary easing,” adds Deutsche Bank.
From Anna-Maria Borse, 9 September 2024, © Deutsche Börse AG
Comments