02.05.2019 – Special report. The balance sheet season is continuing briskly and yet the German retail sector in Frankfurt has recently lacked momentum. Some brokers referred to the statements of the Federal Reserve from the previous evening. However, the US Federal Reserve only acted as expected and once again pleaded for a wait and see. Asia lacked a tailwind due to public holidays. Perhaps new economic data will bring some movement in the afternoon.
Fresh figures in Frankfurt
With slight oscillations, the DAX moved sideways on Thursday morning. At 44.4, the German industrial purchasing managers’ index was just below the forecast of 44.5. Some quarterly figures also arrived on the trading platform of the stock market.
Volkswagen shares remained at the top of the index. Operating profit did not fall as sharply in the first quarter as some of its competitors, and the figures also met forecasts. Sales rose surprisingly sharply by three percent to 60 billion euros. Fresenius and FMC developed unobtrusively. Both companies exceeded analysts’ expectations for their operating result and confirmed their forecasts. At the end of the DAX, Munich Re was quoted, the share is traded ex dividend.
Interest rate decision in London
Forex trading enthusiasts should keep an eye on the regular market updates to the British pound early in the afternoon. The Bank of England’s interest rate decision is due at 1 p.m. German time. Hardly any analyst expects the currency guardians in London to lay hands on the key interest rate of 0.75 percent before a final Brexit decision. You can see all scheduled events here by scrolling down: Market Mover
Public holidays in Asia
The major stock exchanges in Asia remained closed on Thursday. In Japan, investors are pleased to take a break from the coronation of the new emperor. And in the People’s Republic of China, today and tomorrow, the Labour Day will be celebrated extensively. After all, trading took place in Hong Kong: Hang Seng closed with a plus of 0.8 percent at 29,944 points.
Setbacks in New York
There was a backstop on Wall Street yesterday. Real-time prices slipped immediately as Jerome Powell disappointed the hopes of some stock markets for a rate cut. The head of the Federal Reserve once again stressed the Fed’s current patience in adjusting interest rates. US President Donald Trump had only called for interest rates to be lowered on Tuesday.
The Dow Jones index lost 0.6 percent to 26,430 points at the closing bell on Wednesday. In April, by the way, the US leading index had gained 2.6 percent; since the beginning of the year, after four months, the increase has already reached 13 percent. The broad-based S&P 500 lost 0.8 percent to 2,923 points on Wednesday. In early trading, the index reached a new record high of around 2,954 points. The Nasdaq 100 lost 0.4 percent to 7752 points.
Incoming economic data were mixed. Employment in the US private sector surprised in April with the strongest growth since July 2018. By contrast, the mood in US industry had surprisingly slipped to its lowest level since October 2016. However, the overall index remains above the threshold of 50 points, signaling growing industrial production.
Apple convinces investors
Apple caused a sensation: the Group’s profit in the second quarter ended at the end of March fell by around 16 percent year-on-year to 11.6 billion dollars. However, the situation had improved by the end of the quarter. In addition, the iPhone manufacturer forecast higher revenues for the current quarter than analysts had expected. In addition, the high-tech group emphasized that its sales in China are stabilizing. Apple is also planning an additional 75 billion dollars for share buybacks and the dividend is to be increased by five percent.
This is what the day brings
As for today’s Thursday, economic data is likely to be the main driver of price movements. At 2.30 p.m. German time, the figures for productivity in the USA are expected to arrive in the first quarter, as well as the weekly initial applications for unemployment benefits. At 4:00 p.m., the order intake for the US industry is scheduled for March.
The Bernstein Bank wishes you successful trades!
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