Weekly outlook “Nervousness remains high: German analyst perspective

The stock market is currently being hit by high volatility. After falling until the previous week, stock prices are rising again. In the new week, many quarterly reports and economic data will be released, and there will be plenty of material for movement.

2024/7/29 Frankfurt (Börse Frankfurt)

After the German and US stock markets ended the week peacefully, there is likely to be a further recovery at the beginning of the new week. “But nervousness is still high,” explains Ralph Umlauf of Helaba. Quarterly financial results for important companies such as Microsoft, Meta, and Apple are scheduled for this week, and there is a possibility that further fluctuations will occur. However, we do not believe that the Eurozone inflation rate or the US Federal Reserve (Fed) meeting will have an adverse effect.

DAX reached x points on Monday morning after Friday's closing price of 18,418 points. The US data is good. The most important US stock index rose sharply on Friday. Nonetheless, losses were recorded across weeks. In particular, the NASDAQ 100 is still about 8% lower than the all-time high that was set about 3 weeks ago. Some tech companies failed to meet high expectations with quarterly results.

According to DZ BankIn particular, there is a possibility that the adjustment phase recently seen in the US stock market will continue moderately in the short termIt's called. “However,The possibility of a global rise until the end of the year remains unchanged” explains analyst Soren Hettler. Either way, the decline in the US stock market is very easy to handle. Considering this year's drastic price increase, consolidation would be appropriate.According to experience over the past few decades, this phase can last up to 8 weeks, and the S&P 500 stock index could reach the 5,250 point range. “This level will be the foundation for a new rise at the end of the year.

Weber Bank's Hannah Thielke advises a wider range of positions. Apart from falling stock prices in the high-tech sector, the deterioration in the macroeconomic environment is also reflected in individual sector corporate reports. Thielke emphasizes that “while major companies are stumbling, small and medium-sized enterprises are facing the best period of the year.” However, it remains to be seen whether this was the beginning of the triumphal march or if it was just a fleeting event. From experience, the favorable global economic environment, which provides the necessary tailwind for small caps, is currently fluctuating. “It is desirable to diversify stock investments again and reduce the weight of popular stocks that have been doing well until now.

BMW, DHL Group, Merck, Volkswagen, Phonovia, etc. will begin settlement in Germany, and Microsoft, Meta, Apple, etc. will begin settlement this week in the US. Commerce Bank predicts that the US financial season will remain strong, although there are disappointments in the high-tech sector. So far, 77% of the S&P 500 companies have exceeded earnings forecasts, but it remains at 56% of the Stoxx 600 companies. The US revenue growth rate is 8%, which is much higher than Europe's 1%. “In Europe, dependence on China, where export markets continue to be sluggish, is increasing, and this is having a particularly adverse effect,” explains Torsten Weinert.

7/30 (Tue)

10:00 a.m. German 2nd quarter GDP. According to DekaBank, the situation in Germany is not good. The tough economic indicators announced so far indicate that GDP declined compared to the first quarter.

11:00 Eurozone: GDP for the second quarter. According to Commerzbank, after a 0.3% increase in the first quarter, the growth rate in the second quarter is likely to fall to 0.2%. However, the growth rate of each country will vary greatly.

7/31 (Wed)

11:00 a.m. Eurozone July Consumer Prices According to Commerzbank, the inflation rate will probably drop to 2.3% and the core inflation rate to 2.7%.

8:00 p.m. America: Interest rate decisions by the US Federal Reserve (Fed). Markets and analysts agree: According to Deutsche Bank analysts, the Fed is likely to leave fund interest rates unchanged at 5.25 to 5.50%. However, the Fed will pave the way for interest rates to improve in September.

August 1 (Thursday)

1:00 p.m. UK: Interest rate decision by the Bank of England. Dekabank anticipates interest rate cuts. The reason behind this is an easing of upward pressure on wages and an overall inflation rate of 2%. Additionally, there is an expectation that service inflation, which is still high, will ease in the next few months.

8/2 (Friday)

2:30 p.m. US: July unemployment rate The US labor market situation is still good, but most indicators show a weak trend, Commerzbank commented. Not only are new hires declining, but the number of job offers is also on a downward trend. At the same time, the unemployment rate has risen slightly, and the rise in average hourly wages has moderated.