FRANKFURT (dpa-AFX) – The corporate earnings season and the interest-rate decision by the US Federal Reserve could move markets in the new trading week. Investors are hoping for strong company reports against a geopolitical backdrop that remains tense. Otherwise, sentiment could sour again after the recent correction in the technology sector, new US tariff announcements, and oil prices that have climbed more sharply again as the still unresolved Iran war drags on.
If earnings season delivers positive surprises, the Dax could again set its sights on its early-July record high of just over 25,900 points. If those surprises fail to materialize and the Iran war threatens to escalate further, levels above the recently contested 25,000 mark are likely to look unrealistic.
Inflation risks stemming from high oil prices are likely to remain for now. That is why the US Federal Reserve is expected to discuss higher interest rates at its meeting, Commerzbank said in its weekly outlook. Economists led by chief economist Jörg Krämer, however, assume policymakers will stay put on Wednesday and leave rates unchanged for the time being.
The Fed would then be following the European Central Bank (ECB), which also left its key rate unchanged on Thursday, for now, as experts expect an increase in September. Higher rates, in turn, are generally bad for the stock market, because investors could then look for more attractive alternatives with lower risk.
‘At the latest after the summer break, the rate lights will all turn red,’ forecasts analyst Jochen Stanzl of Consorsbank, meaning he is leaning toward rising rates. The carefree mood of recent months on the market is giving way to a step-by-step darkening in sentiment.
That leaves hope for strong corporate figures during earnings season, which is running at full speed in Europe and the US in the new trading week. Results from Dax newcomer Hochtief arrive as early as Monday. Heidelberg Materials, another Dax company from the construction sector, is also on the agenda with earnings on Thursday.
After Volkswagen’s disappointing quarter, investors are looking to the other German automakers Mercedes-Benz and BMW, which present their reports on Tuesday and Thursday, respectively. Midweek brings figures from Deutsche Bank and chemicals group BASF.
Flavors maker Symrise opens its books on Thursday, as do sporting-goods manufacturer Adidas and engine builder MTU. Medical technology group Siemens Healthineers follows on Friday.
Big Tech from the US is set to add tension, with Microsoft and Meta reporting on Wednesday and Apple on Thursday. Investors will again be watching for potential announcements of further multi-billion investments in artificial intelligence (AI). These can sometimes weigh heavily on share prices and push a strong quarterly performance into the background. Investors are already questioning how sustainable the AI rally can be, analyst Stanzl explained. Rising bond yields could further increase the nervousness around that question.
The large volume of company results in the new week will be flanked by several key economic data releases. The Ifo business climate index, Germany’s most important economic barometer, is published on Monday. Markets could also be moved on Thursday by second-quarter growth figures for the euro zone and the US, as well as consumer prices from Germany and the euro zone for July, due on Thursday and Friday, respectively./ajx/tih/mis/he
— By Achim Jüngling, dpa-AFX —
