The DAX index extended its winning streak to six sessions, gaining 0.48% on August 13 and closing at 17,812. The bullish trend was fueled by rising bets on multiple Fed rate cuts following a 0.1% increase in US producer prices in July. Hannover Re, SAP, and Infineon Technologies saw gains, while Volkswagen and Mercedes Benz Group experienced losses. Germany's ZEW Economic Sentiment tumbled from 41.8 in July to 19.2 in August, indicating a deteriorating economic outlook. Near-term DAX trends will depend on corporate earnings, the US CPI Report, and Eurozone employment data. Eurozone employment change, industrial production, and GDP figures are expected to be released on August 14. The US CPI Report, which could further influence rate cut expectations, will also be released on the same day. The DAX held above the 200-day EMA but below the 50-day EMA, indicating a bearish near-term but bullish longer-term price trend. A return to 18,000 could signal a run at the 50-day EMA, while a drop below the 17,615 support level and the 200-day EMA could lead to a fall toward the 17,003 support level. The 14-day RSI at 43.59 suggests a potential fall to the 17,003 support level before entering oversold territory.
The DAX index extended its winning streak on Monday, edging up by 0.02%. Hannover Re led the gains with a 5.23% surge. The focus is now on the ZEW Economic Sentiment, which is expected to drop, fueling concerns of an economic recession and potential multiple ECB rate cuts in 2024. Additionally, US producer prices may influence DAX trends, with softer US inflation potentially supporting multiple Fed rate cuts in 2024. German wholesale prices declined by 0.1% year-on-year in July. The ZEW Economic Sentiment numbers for Germany are expected to decline from 41.8 in July to 30.6 in August, potentially signaling a German economic recession. The German economy is predicted to expand by just 0.1% in 2024. On the other hand, US producer prices are forecasted to increase by 0.1% in July.
The DAX index declined by 0.84% on Monday, July 15, closing at 18,591. The decline was attributed to concerns about German economic sentiment and US retail sales. German ZEW Economic Sentiment numbers were in focus on Tuesday, July 16, with economists expecting the index to fall from 47.5 in June to 42.5 in July. Later in the session on Tuesday, US retail sales were also a point of consideration, with economists forecasting retail sales to stall in June after a 0.1% rise in May.
Siemens Energy AG slid by 4.94% on Monday due to concerns about a Trump re-election. Auto stocks also contributed to the DAX's losses amidst concerns about demand. The Chinese economy grew by 4.7% year-on-year in Q2, down from 5.3% in Q1. Industrial production across the Euro area fell by 2.9% year-on-year in May after a decline of 3.1% in April.
Despite the decline, the DAX remained above the 50-day and 200-day moving averages, affirming the bullish price signals. A breakout from the Monday high of 18,744 could signal a move to the May high of 18,893. On the other hand, a break below the 18,500 handle could bring the 50-day EMA into play.
The DAX fell by 0.39% on Tuesday, July 16, ending the session at 18,518. Auto stocks were among the worst performers. The German ZEW Economic Sentiment Indicator fell from 47.5 in June to 41.8 in July. Eurozone inflation figures for June were also released, showing a decline. US retail sales stalled in June after a 0.3% increase in May. The chances of a September Fed rate cut increased from 99.9% on Monday, July 15, to 100% on Tuesday, July 16. FOMC voting Members Thomas Barkin and Christopher Waller are scheduled to speak on Wednesday. The DAX remained above the 50-day and 200-day EMAs, affirming the bullish price signals.
The DAX slid by 1.00% on Friday, July 19, ending the session at 18,172. On Monday, July 22, US politics, corporate earnings, and ECB commentary influenced market risk sentiment. German producer prices declined 1.6% year-on-year in June. Sartorius AG tumbled 15.24% after cutting its annual forecast. Auto stocks also ended the session in negative territory. On Friday, the US equity markets extended their losses. US President Joe Biden withdrew from the US Presidential Election race, backing Kamala Harris as the nominee. The Chicago Fed National Activity Index (CFNAI) requires consideration. Near-term DAX trends depend on corporate earnings, ECB commentary, and US politics. The DAX sat below the 50-day EMA while holding above the 200-day EMA. The EMAs sent bearish near-term but bullish longer-term price signals.
The DAX is expected to open lower on Thursday following weaker data from Wall Street. On Wednesday, it closed at 17,615.15 points, up 1.5%. Stock markets in Europe continued their recovery after economic fears at the start of the week caused share prices around the world to plummet. Stock market participants will be waiting for the weekly data on initial jobless claims in the US to gain more clarity on the outlook for the economy. Applications are expected to fall to 240,000 from the previous 249,000. Companies presenting figures include Rheinmetall AG and Munich Re. Deutsche Telekom increased sales and profits in the second quarter. Siemens achieved an increase in turnover in the spring.