Market News #37 - March 14-18 | How to Handle the Volatile Market This Week?

The outlook remains cloudy for the stock markets this week with ongoing geopolitical tensions. Indeed, the continuous flow of headlines from the Russian-Ukraine conflict is keeping the market in a state of confusion! With all this in the background, the US Federal Reserve has to make a very big decision about interest rates this week. How will the market react? And what else do you need to watch this week? Let’s take a closer look.

The big Federal Reserve meeting :people_hugging:

The US Federal Reserve, led by Jerome Powell, will make a decision about the current interest rate on Wednesday March 16th. This decision comes at a difficult time as relations in Europe and around the world are transforming before our eyes. At the same time, we’re battling with historic levels of inflation, not seen since 1980, and the fallout of the ongoing health crisis.

Jerome Powell has already hinted that the central bank will raise rates by half a percentage point in mid-March, with further hikes coming later in the year. However, the conflict in Ukraine and the prospect of ‘stagflation’ makes the decision less clear. Stagflation is a phenomenon where high inflation collides with slowing growth. The IMF published an alarming report about this last week.

In terms of pure investment, keep your eye on the S&P 500 index which tracks the 500 largest companies in the US. It’s a good way to take the pulse of all the investors on Wall Street, and the index will likely react to any decision by Jerome Powell. With BUX Zero you can follow two ETFs that track this index (S&P 500 ETF Amundi and S&P 500 ETF Lyxor).

What about oil? :oil_drum:

On Thursday March 15th, the Organization of the Petroleum Exporting Countries (OPEC) will release its monthly report. As you probably know, the price of black gold has soared higher recently as western sanctions on Russia drive up the price per barrel. Indeed, oil and gas prices just hit their highest level in decades! However, OPEC has not yet decided to change its balance of supply and demand.

You can also see the movements reflected in the share price of several oil companies. Shell and ExxonMobil, for example, both announced their withdrawal from Russia, leaving billions of dollars behind.

Volkswagen and BMW report their earnings :moneybag:

Let’s turn our attention away from oil and back to the stock market with two important events this week: Volkswagen and BMW quarterly reports.

Volkswagen gets the ball rolling on Tuesday March 15th. According to analyst estimates,

Volkswagen will report approximately €246.69 billion in annual revenue. For comparison, turnover in 2020 was €222.88 billion.

The outlook is also positive over at BMW thanks to the acquisition of its Chinese partner, Brilliance Auto Group. This could increase BMW’s profits by €8 billion over time. The company reports its figures on Wednesday March 16th.

It’s not all good news, however. Volkswagen and BMW’s production has been disrupted lately as they both rely on a Ukrainian supplier. We could see further disruptions in the supply chain over the coming weeks, with no concrete timeline. This could have an impact on the share price of both companies. Additionally, the two German companies have temporarily stopped delivering vehicles to Russia, which is a large market.

Economic and earnings calendar :calendar:

Monday – Trade balance in France (January). Quarterly figures from Talanx.

Tuesday – Inflation rate in France (February). ZEW index of economic sentiment in the eurozone and in Germany (March). Trade balance in Ireland (January). OPEC monthly report. EcoFin meeting. Quarterly figures from Volkswagen, RWE, Rothschild & co and Orpea.

Wednesday – Fed Interest Rate Decision and FOMC US Economic Projections. Quarterly figures from BMW, E.ON and NRJ Group.

Thursday – New car registrations in the Eurozone (February). Inflation rate in Austria and the eurozone (February). US weekly unemployment figures. Quarterly figures from Accenture, Verbund and Veolia.

Friday – Eurozone trade balance (January). Quarterly figures from Vonovia.

Interesting to read :books:

BUX Broadcast #44 | Stagflatie en Bed, Bath gaat Beyond :netherlands:

BUX Börsenausblick #35 | Stagflations-Sorgen?:de:

Do think that the big Federal Reserve meeting will have a big impact on the markets? :thinking:

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A reminder that in these turbulent times it’s important to keep a cool head and make sure your portfolio is well diversified so you can withstand fluctuations. Above all, remember to focus on your own long-term vision and goals. That’s usually the best approach for your portfolio (and your peace of mind!)

We’ll be back next week for another edition of Market News. In the meantime, have a great week on the markets! :wave:t4:

All views, opinions, and analyses in this article should not be read as personal investment advice and individual investors should make their own decisions or seek independent advice. This article has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is considered a marketing communication.

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