The leading German index gave up almost all of its initial gains on Wednesday ahead of important monetary policy decisions in the USA.
The DAX started the trading day with an increase of 0.28 percent at 14,851.96 points, but is now only at the previous day’s level.
This means that it is still clearly above the low since March of 14,630 points that it reached the previous week, but it now has to come to terms with the 14,800 point mark again. This had been a tough resistance in the past few days, but the DAX had overcome it. Now it remains to be seen how sustainable this development is.
The DAX ended October with a loss of around 3.8 percent. It was the third month of losses in a row. The geopolitical concerns along with high yields in the bond market are considered to be the main reasons for the losses in the stock market.
The Fed’s key interest rate decision was the highlight of the day
There is hardly any impetus from the reporting season in this country on Wednesday. However, some economic data from the USA will be of interest, before US bond plans and the US Federal Reserve’s interest rate decision will attract investors’ attention in the evening after the European stock market closes.
According to economists, the Fed will probably leave interest rates unchanged again. This would mark the second time in a row that she would remain silent. The key interest rate range would remain between 5.25 and 5.50 percent. What is particularly exciting, however, is the question of whether the central bank will change interest rates again at the following meetings. That’s why Fed Chairman Jerome Powell’s statements at the subsequent press conference are eagerly awaited.
“The high growth of the US economy and the persistently tight labor market actually only allow one message: The Fed will not rule out further interest rate increases and will maintain the current level for a longer period,” believe the stock market experts at Index Radar. If Fed Chairman Jerome Powell leaves the option of future tightening open, it will likely be a “bitter pill” for the market, said Jochen Stanzl, market analyst at CMC Markets. Investors would then have to prepare for the fact that interest rate cuts are not on the agenda for the time being. “The risk of a ‘hopeless pause’ in rate cuts is high.”
US bond auctions in view
Also in view on Wednesday evening are data on bond auctions in the USA – for analyst Jochen Stanzl from the broker CMC Markets, this is also a stress test for the stock market, as the market reacts hypersensitively to factors that could lead to rising returns.
Editorial team finanzen.net / dpa-AFX