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What to watch: BMW boosts growth forecast, Fed meeting in focus, Hargreaves rises on profits upgrade

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Suban Abdulla
·4-min read
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BMW headquarters in Munich, Germany. Photo: Christof Stache/AFP via Getty Images
BMW headquarters in Munich, Germany. Photo: Christof Stache/AFP via Getty Images

Here are the top business, market and economic stories you should be watching today in the UK, Europe and abroad:

BWM sees significant growth in 2021

German carmaker BMW said that it expects a major increase in group profits in 2021, as the company forecast a strong performance in all of its businesses.

BMW (BMW.DE) said it expects its automotive business to record a solid year-on-year increase in deliveries, with the segment’s EBIT margin expected to rise to between 6% and 8% — compared with 2.7% last year.

The group, which also owns the Rolls-Royce and Mini brands, is also targeting a steep rise in electric vehicle sales by the end of the decade. The company said it expects half its cars to be electric by 2030.

Watch: BMW speeds towards mostly electric cars by 2030

"We have started the new year with strong momentum and are aiming to return to pre-crisis levels as swiftly as possible," CEO Oliver Zipse said in a statement on Wednesday.

He added: "We have a clear road map for making the transformation of our industry a real competitive advantage for BMW in the coming years."

Shares in the company gained 4.3% in morning trading.

Chart: Yahoo Finance
Chart: Yahoo Finance

Federal Reserve in the spotlight

Federal Open Market Committee (FOMC) officials kicked off a two-day policy meeting on Tuesday and chair Jerome Powell is expected to make concluding remarks on Wednesday — around 6PM UK time — that could indicate whether the US central bank will tweak its interest rates outlook.

There are expectations that the Fed will hold its dovish stance with expectation that the central banks will hold the US interest rate at 0.25%.

Russ Mould, investment director at AJ Bell, said: "The Fed seems content to keep monetary policy ultra-loose in its attempts to let the economy run hot as it recovers from the effects of the pandemic. Fixed-income markets have become a little more nervous, but equity markets seem happy about it so far.

"Markets will therefore want to know what any upgrades to US economic expectations mean for monetary policy and when interest rates might go up. Policy changes aren’t expected at this meeting, but the Fed’s comments will be closely watched for any clues as to what it might do over the next two years."

Hargreaves Lansdown rises on profits upgrade

Hargreaves Lansdown (Hl.L) announced on Wednesday that profits will top the markets forecast as customers of the FTSE 100 (^FTSE) investment platform continued to trade in exceptional volumes.

It said that it saw a rise in volumes of share dealings at the end of January — with an increased proportion of these directed towards international equities, especially in US stocks.

It comes after demand for US stocks reached new heights recently amid the GameStop/Reddit retail-investor frenzy and a string of high-profile stock market flotations.

Pre-tax profits for the financial year ending 30 June 2021 should now modestly exceed the top end of market forecasts that currently stand at a range of £334m ($465m)-£360m, Hargreaves said.

Company shares rose nearly 2% this morning on the announcement before trickling down to 1% around 9am in London.

Graph: Yahoo Finance
Graph: Yahoo Finance

Stocks mixed ahead of Fed meeting

Europe went into the red after initially opening flat after the bell as investors await the Federal Reserve's announcement of new economic and interest rate forecasts on Wednesday.

Britain’s FTSE 100 (^FTSE) was down 0.3%, while France’s CAC (^FCHI) and Germany’s DAX (^GDAXI) declines 0.1%.

It came despite fears over the pace of the continent’s COVID-19 vaccine rollout and rising cases in Germany. Several nations, including France, Germany, Spain, Italy and Sweden halted AstraZeneca (AZN.L) jabs as a precaution following reports of blood clotting in some patients.

In Germany, the ZEW economic sentiment survey – conducted prior to the vaccine suspension – showed that investor sentiment rose by more than expected in March, lifting the outlook for eurozone-wide recovery.

Across the pond, S&P 500 (^GSPC) ended a five-day winning streak down (0.2%), Dow Jones (^DJI) fell 0.4% and the tech-heavy Nasdaq (^IXIC) rose 0.1%.

Stocks in Asia closed in the red overnight as markets gauged the risk of a potential shift in the Fed’s dovish policy forecast. Japan’s Nikkei (^N225) fell 0.02% the Hang Seng in Hong Kong (^HSI) declined 0.04% and China’s SSE Composite index (000001.SS) closed 0.03% down.

Watch: What are SPACs?