DAX Index Today: ECB Chatter, Corporate Earnings and US Inflation

The Overview of the DAX Performance

The DAX slid by 0.95% on Thursday (April 25). Following a 0.27% loss on Wednesday (April 24), the DAX ended the session at 17,917.

German Consumer Confidence Improves

On Thursday (April 25), German consumer confidence was in focus. The GfK German Consumer Climate Indicator increased from -27.3 to -24.2 for May. While income expectations returned to positive territory, the willingness to save increased. Upward trends in willingness to save highlight uncertainty about the economy and the labor market.

US GDP and Jobless Claims

On Thursday (April 25), US GDP and jobless claims figures garnered investor attention. The US economy expanded by 3.1% in Q1 2024 after growing by 3.4% in Q4 2023. Economists expected the economy to expand by 3.0%. Initial jobless claims slipped from 212k to 207k in the week ending April 20.

The stats reduced investor bets on a September Fed rate cut, pressuring riskier assets.

On Thursday, the Dow slid by 0.96%. The Nasdaq Composite Index and the S&P 500 declined by 0.64% and 0.46%, respectively.

The Thursday Market Movers

Deutsche Bank surged 8.30% on better-than-expected earnings results. Commerzbank advanced by 1.44%.

However, tech stocks had a mixed session as investors reacted to Meta (META) earnings results from Wednesday (April 24). Infineon Technologies rallied 3.60%, while SAP slid by 3.05%.

Auto stocks tracked the broader market into negative territory. BMW declined by 1.41%. Volkswagen and Mercedes Benz Group saw losses of 1.08% and 1.08%, respectively. Porsche ended the session down 0.81%.

The ECB and Corporate Earnings

On Friday (April 26), investors should consider ECB commentary. Recent German economic indicators signaled an improving macroeconomic environment. Views on the ECB interest rate trajectory after June need consideration. Calls for patience and a slow return to monetary policy normalization could impact buyer demand for DAX-listed stocks.

However, US corporate earnings results from overnight (Thurs) need consideration. Alphabet (GOOGL) and Microsoft (MSFT) were among the big names to release earnings results in after-hours trading.

Microsoft rallied 4.31% in after-hours trading, with Alphabet surging 11.43%.

US Personal Income and Expenditures Report

Later in the session, the Personal Income and Expenditures Report warrants investor attention. Sticky inflation figures and upward trends for personal income and spending could sink expectations of a September Fed rate cut. Investor bets on a more hawkish Fed rate path could affect DAX-listed stocks.

Economists forecast the Core PCE Price Index to increase 2.6% year-on-year in March after rising 2.8% in February. Moreover, economists expect personal income and spending to advance by 0.5% and 0.6%, respectively.

Other stats include finalized Michigan Consumer Sentiment and pending home sales data. Revisions to the Michigan Consumer Sentiment and Michigan Inflation Expectations could move the dial.

Beyond the stats, Exxon Mobil (XOM) and Chevron (CVX) are among the marquee names to release corporate earnings.

Near-Term Outlook

Near-term trends for the DAX will hinge on ECB commentary and the US Personal Income and Expenditures Report. Hotter-than-expected US inflation numbers and upward personal income/spending trends could affect buyer appetite for riskier assets. However, investors should also consider corporate earnings results.

On the Futures markets, the DAX and the Nasdaq mini were up by 70 and 201 points, respectively.

DAX Technical Indicators

Daily Chart

The DAX held above the 50-day and 200-day EMAs, confirming the bullish price signals.

A DAX return to 18,000 could give the bulls a run at the Wednesday (April 24) high of 18,226.

Investors should consider ECB, corporate earnings, and the US Personal Income and Expenditures Report.

However, a DAX fall through the 17,850 handle could signal a drop to the 50-day EMA. A break below the 50-day EMA would bring the 17,615 support level into view.

The 14-day RSI at 48.33 suggests a DAX fall to the 17,615 support level before entering oversold territory.

4-Hourly Chart

The DAX hovered below the 50-day EMA while remaining above the 200-day EMA. The EMAs sent bearish near-term but bullish longer-term price signals.

A DAX break above the 50-day EMA would support a return to the 18,200 handle.

Conversely, a drop below the 17,800 handle would bring the 200-day EMA and the 17,615 support level into play. Buying pressure could increase at the 17,615 support level. The 200-day EMA is confluent with the 17,615 support level.

The 14-period 4-hour RSI at 47.45 indicates a DAX drop to the 17,615 support level before entering oversold territory.