Investors on both sides of the Atlantic can look back on a successful trading week so far. While the DAX reached a new record high of over 18,936 points, the Dow Jones Industrial Average Index climbed to 41,577 points, also a new high. After the disappointing NVIDIA figures, the focus is likely to turn to important US price data at the end of the week.
DAX Chart
Source: Tradingview
Ifo index disappointed - US data convincing
At the beginning of the week, the widely observed ifo business climate index once again caused a stir with a decline. According to the Munich-based ifo Institute, the mood among companies in the Federal Republic of Germany is still in decline. The index fell to 86.6 points in August, down from 87 points in July. "The German economy is increasingly facing a crisis," it continued.
Meanwhile, orders for durable goods in the USA rose by 9.9% compared to the previous month, significantly more than expected (5.0%), after the sector had slumped by 6.9% in the previous month.
Consumer climate remains gloomy in Germany - NVIDIA figures do not quite meet expectations
On Tuesday, it was the GfK consumer climate in Germany which, like the ifo data, disappointed. The institute expects a value of -22 points for September, after -18 points in August.
The situation in the USA is different, however. At 103.3 points, the Conference Board's consumer sentiment for August was significantly better than expected (110.7 points).
Wednesday, however, was dominated by the publication of NVIDIA's quarterly figures after the US stock market closed. The AI chip manufacturer had forecast sales above Wall Street estimates. However, the expectations, which had already been set high in advance, were not fully met. NVIDIA forecast a turnover of 32.5 billion dollars (plus or minus two percent) for the third quarter, compared to average estimates of 31.77 billion dollars.
In the second quarter, NVIDIA achieved a turnover of 30.4 billion dollars (forecast: 28.70 billion dollars). Obviously, investors were hoping for even more. After publication, the shares fell by almost seven percent.
German and European inflation continues to fall - US price data likely to provide important impetus
The fact that German inflation is continuing to fall is likely to have further fueled the ECB's interest rate cut fantasies in the eurozone. According to preliminary data, consumer prices rose by 2.1% in August, compared to 2.3% in July.
On Thursday, investors were once again increasingly confronted with US data. The fact that the US economy may grow more strongly than expected in the second quarter should alleviate concerns about recession.
The labor market data also turned out better than expected. The number of initial applications for US unemployment benefits fell last week, as the US Department of Labor announced on Thursday. A total of 231,000 citizens filed a corresponding application, compared to 233,000 applications the week before. The threshold of around 270,000 units is considered critical.
On the last trading day of the week, a falling inflation rate in the eurozone is likely to have further brightened the mood. The main reason for the lowest level in over three years is falling energy prices. Goods and services rose by an average of 2.2 percent compared to the same month last year, after 2.6 percent in July.
The focus today (Friday) will be on new US price data (14:30). According to economists, the so-called PCE deflator (core rate) for personal consumption expenditure could have risen by 2.7% compared to the same month last year, after 2.6% in June. An increase could possibly revive inflation concerns. However, few investors are likely to have any doubts about a first interest rate hike at the upcoming September meeting.
