The pace of growth is likely to continue in the coming week: numerous companies are presenting their quarterly results, investors are receiving fresh indicators on the economy, and US central bankers are meeting for an interest rate decision.
According to financial experts, it could come in the coming weeks on the stock markets to greater fluctuations. "In May, the pulse of the markets will rise," says Robert Greil, chief strategist of the private bank Merck Finck. Already in the new trading week, the volatility on the stock markets is likely to increase "with the impending wave of economic and corporate figures".
May is a month-long exchange-dodged month, with important events soon to follow: in addition to the election of the European Parliament on 26 May, changes in trade between the US and China and the EU are also expected, according to Greil.
In the past week, the prices of the leading indices on the bottom line have moved only slightly. The Dax recorded an increase of 0.8 percent on a weekly basis and retired on Friday at 12,315 points. The European index Euro Stoxx 50 closed almost unchanged at 3500 points. Similar to the Dow Jones in the US, the index closed on Friday at 26,543 points.
Since the beginning of the year, however, the stock markets have been steadily uphill. The Dax has gained just under 18 percent. Commerzbank analyst Markus Wallner attributes this to the US Federal Reserve's refusal to raise interest rates further and to ease fears of recession in the US and China. So far, however, the price gains only a higher rating is responsible, while the analysts' earnings expectations for most Dax companies continue to fall.
"For a further significant price increase, the profit expectations would have to increase," said Wallner. In stock selection, therefore, investors should continue to pay attention not only to the valuation but also to the company's profit growth more than the overall market. This is the case with HeidelbergCement, SAP and Wirecard, for example.
DZ-Bank analyst Michael Bissinger also expresses concerns: "Given the weak economic environment and the strong price development, the air in the stock markets is much thinner." As a constant risk factors, he cites the tariff policy, the Brexit and political turmoil in EU core countries ,
They could prevent a further rise in the stock markets and lead to repeated setbacks. By the end of the year, the DZ Bank calls for the Dax a target price of 12,000 points, the Euro Stoxx 50 see the analysts at 3,400 points.
David Kohl, Germany's chief economist at the private bank Julius Baer, also attributes the recovery on the American stock market to the fact that the Fed has renounced further interest rate increases. He is optimistic about the further development in the US: "The recovery of stock prices, a cautious central bank and lower wage pressure are good prerequisites for higher corporate profits. This could provide another positive surprise for investors, "said Kohl.
In Europe, on the other hand, with the decline in inflation, the pressure of action on the European Central Bank (ECB) to show signs of monetary policy is growing. At the same time, this weakens the euro. "We still expect the EUR / USD to weaken a little further to 1.10 in the coming months and thus make a small contribution to improving the economic situation in Germany and the euro zone in the coming months." says Kohl.
A foregone conclusion is that stock market gains will not be felt on the stock market, warns Esty Dwek, chief investment manager at asset manager Natixis. "A sustained rally needs the fundamental support of decent growth in corporate earnings." In the new week, investors will be provided with plenty of new business figures and company outlooks. Numerous economic data are also on the schedule.
This will continue in the coming week
Monday: Quarterly figures come at the beginning of the week among others by the German stock exchange, Kuka, Fielmann, Covestro, German Euroshop and the Google mother alphabet. From the economic side come the US consumer spending.
Tuesday: Commerzbank's subsidiary Comdirect, Spain's Banco Santander, Standard Chartered of Great Britain and SEB and Nordea of Sweden will be releasing their first-quarter figures on Tuesday. In addition, the reinsurer invites Munich Re to the Annual General Meeting. In the US, investors are looking at iPhone maker Apple.
Wednesday: Due to the May holiday, no action is taken on the Frankfurt Stock Exchange in the middle of the week. In the US, the private employment agency is publishing figures on employment, giving a taste of the official data that follows on Friday. The US Federal Reserve will also announce its interest rate decision.
Thursday: In Germany, Hugo Boss, Fresenius Medical Care and Volkswagen report on the first quarter on Thursday. The neighboring European countries include BNP Paribas, AXA, Lloyds Banking Group and ING Group.
Friday: For the weekend, numbers from Adidas, Grenke, BASF, Rhön-Klinikum, Xing and Nexus are expected. In the US, Berkshire Hathaway, the investment firm of Warren Buffett, is showing numbers. The employment figures for the US should also be published on Friday.
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