The debate about scaling back economic aid from the US Federal Reserve is likely to maneuver the stock exchanges into stormy waters in the new week. Experts anticipate greater price fluctuations. Investors are likely to hold their breath, especially when Fed chairman Jerome Powell steps in front of the microphones at the traditional central bankers’ conference in Jackson Hole on Friday.
Because according to the most recent minutes of the US Federal Reserve’s meeting, stockbrokers assume that the flood of money could subside faster than assumed. Commerzbank economist Bernd Weidensteiner does not expect any new monetary policy signals, however, as the Federal Reserve has already communicated the repayment of its bond purchases. “The tapering decision in the fourth quarter and the end of the bond purchases in mid-2022 are looming.” Nevertheless, stockbrokers are nervous because the exact topic of Powell’s speech will, as always, only be announced shortly before the event that begins on Thursday.
Supply chain problems are becoming increasingly serious
The German benchmark index is also in dangerous territory in terms of charting, says analyst Jochen Stanzl from the trading company CMc Markets. “As long as it is not possible to overcome the hurdle of 15,800 counters again, the Dax will remain battered and susceptible to a major slide down at any time.” The leading German index closed at 15,808 points on Friday. The weekly loss is 1.1 percent.
A week earlier, the index broke the 16,000-point barrier for the first time. It seems that the Dax has used up its last reserves of strength, summarized the Helaba strategists. In any case, the recent increase had a negative impact on low trading turnover and structural weaknesses in DAX companies.
“In addition, various stress factors have been ignored for a longer period of time, for example the corona development and especially the supply chain problem.” Investors became aware of the latter at the latest through the Japanese car manufacturer Toyota, which had caused a stir in the industry with drastic production cuts due to the shortage of chips. Delivery difficulties as well as the price increases for raw materials and intermediate products are currently causing problems for companies in all areas.
The Swiss Market Index closed on Friday at 12,415 points. The weekly loss is 0.4 percent.
New corona wave in view
Investors are also following with a fearful eye how the rising number of corona cases could affect the economic recovery. It is only a matter of time when politicians will noticeably tighten the corona restrictions again, according to Commerzbank. Service providers in particular are likely to suffer from this again. However, this is unlikely to have an impact on Monday’s upcoming purchasing managers’ index for this sector in August.
Also on the agenda on Wednesday are the Ifo business climate index in Germany and incoming orders for durable goods from the USA, followed by US GDP on Thursday. At the end of the week, the price index for US consumer spending is due. According to experts, the surge in inflation should lose momentum in July. The buying mood of investors has recently also dampened government intervention in the private sector in China. It is still unclear how the latest wave of regulations could affect companies, say stock exchange traders.
Company balance sheets are only very rarely on the weekly schedule. In Switzerland these are Aluflexpack and Bank Linth on Monday and Arbonia, Bossard, Zurich Airport, Von Roll, Intershop and Vetropack on Tuesday. Allreal, Stadler Rail and Sensirion will follow on Wednesday. On Thursday, Givaudan, Asmallworld, Baloise, Evolva, Kudelski, Molecular Partners, SoftwareONE, SPS and Valartis will present their figures. On Friday it’s Perrot Duval and Repower’s turn.
(Reuters/cash)
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