20 – 24 Sept. | Prepare for the week with DAX, Adobe, and the ECB

It’s another busy month for the financial markets. We’ve got monetary meetings on both sides of the Atlantic, followed by German elections looming at the end of September. Not only that but famous Wall Street trader Larry Williams has issued a warning based on what he sees in the financial charts.

So, what can we expect from the week ahead? Let’s take a closer look at the news that might impact your portfolio.

The German index gets a makeover

As of Monday, September 20th, the DAX will increase from 30 stocks to 40 stocks. It’s the biggest change in the flagship index since its creation in 1988. To qualify for inclusion in the index, new stocks had to submit reinforced measures to avoid a repeat of the ‘Wirecard scandal,’ in which the fintech company collapsed under a series of fraud allegations in June 2020. Wirecard was listed on the DAX at the time.

The new stocks entering the DAX are particularly diversified. It includes the aircraft manufacturer Airbus, clothing companies like Zalando and Puma, meal delivery service HelloFresh, auto holding company Porsche, household appliance maker Siemens, chemistry company Brenntag, biotech firms like Sartorius and Qiagen and perfumery company Symrise.

Beyond the stocks mentioned above, you can also track the German DAX 30 Index ETF (iShares). It’s an ETF that replicates the movements of the DAX and should include this major change.

Adobe publishes its results

The US software company behind Photoshop will release figures for its recent quarter on Tuesday, September 21st. Earnings-per-share are expected to come in at $3, up 20.32% year-over-year. Revenue is expected to reach $3.8 billion, up 20.32% from the same quarter last year.

Adobe has particularly high profit margins in the tech sector. The trend may continue as Adobe continues to acquire big names in software, such as Frame last month.

Two-day meeting for the ECB

Christine Lagarde, president of the European Central Bank, recently indicated that the institution will begin ‘tapering’ its bond purchases over the next three months. It’s part of the Pandemic Emergency Protection Program (PEPP) which is a strategy aimed at combating the negative impact of Covid-19 on the economy. This reduction in purchases suggests there is an improvement in economic conditions across the eurozone.

More information will be discussed and debated at the next ECB meetings, scheduled for Wednesday 22nd and Thursday 23rd September. You can keep an eye on ETFs that include shares of major European banks such as the EU Banking Sector ETF (iShares).

Economic and results calendar

Monday – Trade balance in Spain.

Tuesday – Consumer confidence in Belgium and the Netherlands. Quarterly figures from Adobe and Aurora Cannabis.

Wednesday – ECB monetary meeting. Industrial sales in Italy. Weekly stocks of oil in the United States. Second quarter GDP in the Netherlands. Blackberry quarterly figures.

Thursday – Manufacturing and services PMI index in France, Germany and the eurozone. Second quarter GDP in Spain. General meeting of the ECB. Decision on interest rates in Great Britain. Quarterly figures from Costco.

Friday – Unemployment figures in France.

We’ll be back next week with another edition of the BUX Breakdown. In the meantime, have a great week on the markets.

The BUX Breakdown was written by Clémentine Pougnet.

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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.