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All eyes on Jerome Powell: The Fed is likely to raise rates three to four times this year.
The Fed chair will comment tonight on the timing and pace of the rate hikes
Photo: DREW ANGERER / AFP
The German stock market continued its recovery with significant price gains on Wednesday before the eagerly awaited monetary policy signals from the US central bank.
The Dax was 2.09 percent higher at 15,440 points in the late morning.
The leading index has thus made up for around a third of its loss since the high for the year on January 5th.
The MDax recently gained 2.45 percent to 33,218 points.
The evening's focus will be on the Fed's interest rate decision and in particular the press conference with Fed Chair Jerome Powell.
Many experts expect the announcement of an imminent interest rate hike.
Even more important for the market than the turnaround in interest rates are indications of the pace of the tightening.
However, it is hardly possible to surprise the markets on the restrictive side, since a lot has already been priced in, Commerzbank's foreign exchange market experts recently explained.
At least three rate hikes are expected this year, with the first rate hike probably in March at the latest.
According to stockbrokers, the big question is how the Fed will manage the balancing act of fighting high inflation and at the same time protecting the financial markets from imbalances.
Goldman Sachs strategists are now warning of the risk of an interest rate-related growth shock.
The prospect of rising interest rates has long been viewed as a problem, particularly for heavily indebted companies in the technology sector.
Airbus and Lufthansa in demand
Among individual stocks, shares of Airbus
took the spotlight
on Wednesday .
At the aviation and armaments group, the helicopter business recovered a good deal from the Corona crisis in 2021.
The aircraft manufacturer's papers soared by 5.2 percent and were the frontrunners in the Dax.
Lufthansa
shares jumped 6.2 percent.
The analysis house Stifel had upgraded the airline's shares from "hold" to "buy" and raised the price target from 6 to 10 euros.
The biggest worries have been eliminated and Lufthansa is facing strong summer business, wrote analyst Johannes Braun.
The airline and the container and cruise line MSC are also considering acquiring a majority stake in Alitalia's successor, ITA Airways.
Wacker Chemie
shares
advanced by 7.0 percent.
The chemical group, which specializes in the solar and semiconductor industries, got off to a good start in the new year.
Aareal Bank
's investors
don't seem to like the increased takeover bid by financial investors Advent and Centerbridge.
The shares of the real estate financier stagnated at 27.86 euros.
USA: Dow cuts losses, Nasdaq remains under pressure
Trading on the US stock exchanges was also characterized by nervous fluctuations on Tuesday.
As on the previous day, trading started with investors fleeing the risk.
The Dow Jones Industrial temporarily recovered an early drop of more than two percent, supported by well-received quarterly figures from some index members.
In the end, however, there was again a slim minus of 0.19 percent on the course board with 34,297 points.
Investors' nervousness, which has been noticeable for days, ahead of the US Federal Reserve's interest rate decision expected on Wednesday, continued to make itself felt on the broader market and among technology stocks.
The market-wide S&P 500 lost 1.22 percent to 4356.45 points.
The technology-heavy Nasdaq 100, which fell by 2.48 percent to 14,149 points, is particularly affected.
In the Dow, the top index for
American Express stocks rose almost nine percent
.
The credit card group impressed in the fourth quarter with a strong jump in sales and profits, which exceeded expectations according to the experts at Evercore ISI.
But the papers from
IBM also closed comfortably in the profit zone with 5.7 percent after good figures
.
Strong demand for cloud software and IT services had brought the IT group the largest increase in sales in years.
Analyst Mirko Maier from LBBW saw the numbers here as well above expectations.
Oil stocks were also in demand in the wake of rising oil prices.
Chevron were among the biggest gainers on the Dow, up 4.3 percent.
Commodity analyst Carsten Fritsch from Commerzbank did not see a correction that took place the day before as a sign of a trend reversal.
Netflix and Nvidia under pressure
With the Nasdaq stock market slipping again,
Netflix shares remain a symbol of the recent weakness in the technology stocks concentrated there.
On Tuesday they fell 5.4 percent to a good $366, but remained within the pronounced fluctuation range of the previous day.
They were trading close to the $350 mark for the first time since the early phase of the corona pandemic.
Meanwhile, Nvidia shares dominated the still weak chip sector with a discount of 4.5 percent.
According to insiders, the graphics card specialist no longer expects to take over the chip designer Arm because the regulatory hurdles are too high.
Bernstein Research analyst Stacy Rasgon said the deal was a great deal.
Bitcoin above $37,000
Cryptocurrencies are attempting a recovery after the recent sell-off.
A Bitcoin last cost $37,906 after the world's most important cryptocurrency temporarily fell to $33,000 on Monday.
Since hitting a record high of $67,000, bitcoin has lost more than half of its market capitalization in just ten weeks.
Trading remains extremely volatile: Since the low on Monday afternoon, the cyber currency has gained around 10 percent in value again because crypto fans are hoping for a bottoming out.
Meanwhile, the narrative that cryptocurrencies like bitcoin work as an inflation hedge because the number of bitcoins is limited has been proven to be false.
As investors seek refuge in gold, the selling pressure on Bitcoin and other cybercurrencies has escalated over the past few weeks, falling even more than the stock market.
Oil prices are recovering
Oil prices continued to recover on Wednesday, but without fully recouping losses from earlier in the week.
Recently, a barrel (159 liters) of the North Sea
Brent
cost just under 88 US dollars.
That was 92 cents more than on Monday.
The price of a barrel of the US
West Texas Intermediate
(WTI) variety rose by 70 cents to $84.01.
At the beginning of the week, oil prices were weighed down significantly by the poor mood on the stock markets.
Notwithstanding, oil prices have recently retreated somewhat from the seven-year highs they marked last week.
A scarce supply with an increasing demand ensures the basic upward pressure on prices.
The current omicron wave is dampening the development, but far less than previous corona waves.
Crucially, the short-term health consequences of the omicron variant of the virus are usually less severe.
With news agencies
