Ahead of the upcoming Fed interest rate decision and the flood of quarterly earnings after the US stock market closes, many investors are likely to hold back for now. Many market participants are keeping their powder dry given the situation. While monetary policy, geopolitics, and corporate earnings are currently vying for investor attention, markets seem increasingly torn in the short term between expectations for the central bank and the ongoing earnings season. The sheer volume of corporate earnings has the potential to at least temporarily divert investor attention from monetary and geopolitical issues.
Please note that the stock exchanges in Frankfurt am Main will remain closed due to the May 1st holiday (Labor Day).
DAX
Iran conflict appears deadlocked – Geopolitical uncertainty remains smoldering
Even though the Iran conflict remains unresolved, markets are increasingly numb to geopolitical risks, which could at least prevent further major losses for now. At the same time, sentiment remains fragile and could quickly turn with new headlines. Investors are still waiting in vain for further peace negotiations between Washington and Tehran. The Strait of Hormuz, which is effectively closed, is also likely to continue to worry investors.
German inflation data and Fed interest rate decision ahead
This afternoon, the preliminary inflation data for the Federal Republic of Germany will be on the agenda (2:00 PM). It will be interesting to see how the effects of the ongoing Iran crisis are reflected in the data.
According to the CME Group's „FedWatch Tool,“ 100 percent of market participants expect a pause in interest rates. The interest rate range remains at 3.50 to 3.75 percent. Particular attention should be paid to the rhetoric of Fed Chairman Jerome Powell.
China data, GDP growth figures, and ECB in focus on Thursday
In the night from Wednesday to Thursday, important economic data from the Middle Kingdom will also be in focus (03:30 AM).
Today, keep an eye on the GDP growth rates for the Federal Republic of Germany (10:00 AM), the Eurozone, and the United States (2:30 PM).
Additionally, the European Central Bank's (ECB) monetary policy meeting is likely to be eagerly awaited (2:15 PM). Starting at 2:45 PM, the press conference with President Christine Lagarde will follow.
Also in focus is the core personal consumption expenditures rate (2:30 PM).
Last but not least, the ISM Purchasing Managers' Index (PMI) will be the focus on Friday (4:00 PM), which investors can consequently only react to again on Monday due to the holiday.
Earnings season on both sides of the Atlantic in focus
Here in Germany, the focus today is on the results of the past business quarter from Deutsche Bank (ISIN: DE0005140008, Mercedes-Benz (ISIN: DE0007100000), Adidas (ISIN: DE000A1EWWW0), Porsche (ISIN: DE000PAG9113), and Scout24 (ISIN: DE000A12DM80). On Thursday, Deutsche Post (ISIN: DE0005552004), BASF (ISIN: DE000BASF111), Volkswagen (ISIN: DE0007664039), MTU Aero Engines (ISIN: DE000A0D9PT0), and Puma (ISIN: DE0006969603) will report, followed by Linde (ISIN: IE000S9YS762) on Friday.
After the US stock market closes, results from Alphabet C (ISIN: US02079K1079), Amazon (ISIN: US0231351067), Ford (ISIN: US3453708600), Meta Platforms (ISIN: US30303M1027), and Microsoft (ISIN: US5949181045) are expected. On Thursday, Apple (ISIN: US0378331005) and Riot Platforms (ISIN: US7672921050) will report, followed by Berkshire Hathaway B (ISIN: US0846707026) on Friday.
