The three big indices again reached new all -time highs this week. As expected, the US Federal Reserve Fed has reduced 25 basis points. Jerome Powell justified this decision with the weakened economy and a weakening labor market. The Bank of Japan unchanged the key interest rate at 0.25 percent, but disappointed investors with a plan to sell their extensive ETF stocks. The Bank of England also keeps the key interest rate constant in view of the still high inflation. Continental has split off Aumovio this week; Shareholders receive an Aumovio share for two Continental shares each. In the American tech sector, Nvidia surprised: the company supports Intel with a financial injection of around $ 5 billion.
Global stock market – new all -time highs in America – Dax unchanged
On Friday morning, the DAX® noted around 0.2 percent above the pre -week closing course. On Thursday evening, the S&P 500® and NASDAQ-100 Index® closed about 1 percent firmer compared to the pre-week closing course compared to the pre-week closing course. The Dow Jones Industrial Average® also gained 0.7 percent compared to the preliminary weeks. Thus, all major US indices reached new all-time highs this week.
Fed announces interest reduction by 25 basis points
Central bank boss Jerome Powell announced a key interest rate for 25 basis points on Wednesday evening. The interest corridor is now between 4 and 4.25 percent. The FED justified the decision with a weakening of economic activity and slowed -down employment growth. At the same time, the central bankers emphasized that the economic situation remains uncertain.
Stephen Miran, a member of the Fed management committee since Tuesday, would have liked an interest reduction by 50 basis points. A claim that US President Donald Trump also supports. There is great disagreement about the further course of the Fed: on average, the central bankers expect two further interest reductions for 25 basis points each this year.
Jerome Powell sees the risk of inflation as weakened. However, there is no risk -free way. He would like to focus more on the weakened labor market and consider the interest rate reduction as a measure of risk management.
In addition to interest decision, Bank of Japan surprise the sale of equity funds
The Bank of Japan surprised investors negatively on Friday. The Nikkei-Index® reacted promptly and lost around one percent. However, the setback is not due to the decision to leave the key interest rate at 0.5 percent. Rather, the Bank of Japan presented a concrete plan for the first time to reduce its huge stock of ETFs.
At the same time, the central bank emphasized that it wanted to avoid destabilizing effects as far as possible when selling. It is planned to sell stock market -traded funds worth around 1.9 billion euros and real estate funds worth around 28 million euros.
Bank of England leaves interest stable at 4 percent
On Thursday, the Bank of England’s monetary policy committee decided to leave the key interest on unchanged. The reason for this is the persistently high inflation in Great Britain, which is one of the highest of all major industrialized nations. Seven central bankers voted for an interest break, two voted for an interest rate reduction by 25 basis points. The returns of British government bonds gave up slightly, as did the stock market in London. The British pound grew slightly compared to the US dollar. In August, inflation in Great Britain was 3.8 percent, almost twice as high as the inflation goal. Prices for food and energy are increasing particularly stubbornly.
Continental divides Aumovio off
Continental divided into two independent companies on Thursday. The split -off company, the car supplier Aumovio, is rated on the stock exchange at 3.5 billion euros. The first course was 35 euros on the Frankfurt stock exchange on Thursday. Continental shareholders received an Aumovio share booked in the depot for two Continental shares. Aumovio is the first newcomer to the strictly regulated Prime Standard this year. The share was included in the DAX® for one day. This is common for splitting so that index investors can sell the booked stocks in an orderly manner. Aumovio produces braking and security systems, vehicle software as well as displays and electronics.
NVIDIA is investing around $ 5 billion in Intel – share increases by around 23 percent
Intel, once a pioneer in the chip industry, has become increasingly important in recent years. The company now receives support from the Nvidia industry leader. Both companies announced on Thursday that Nvidia would like to acquire Intel shares worth $ 5 billion. However, the technical cooperation is even more important than the investment itself: Intel should in future manufacture processors that are specially tailored to Nvidia’s technology for data centers.
The Intel share reacted to the announcement with a course jump of around 23 percent. While Intel used to dominate the industry, the company has lost its importance in recent years, in the smartphone and tablet area, for example, through strong competition from ARM. In the field of artificial intelligence, Nvidia is now almost undisputed.
That was already with the weekly review. In addition to interesting news about the capital market, you are also interested in technical analysis? Then drop by on our Insta Gram Canal. There we regularly publish editions of “Jörg’s Chartschule”.
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Source: HSBC