DAX Index Today: Porsche Earnings, US Producer Prices, and Fed Chair Powell

The Overview of the DAX Performance

The DAX declined by 0.16% on Monday (May 13). Partially reversing a 0.46% gain from Friday (May 10), the DAX ended the session at 18,742. Significantly, the DAX ended a six-day winning streak after falling short of the Friday (May 10) all-time high of 18,846.

ECB and Fed Monetary Policy Divergence in Question

On Monday (May 13), investors shifted the focus to the US economic calendar. The ECB has signaled a June interest rate cut. Nevertheless, investors were cautious before US inflation numbers this week over concerns the ECB could wait until the Fed cuts interest rates.

There were no economic indicators for Germany and the Eurozone to impact buyer demand for DAX-listed stocks.

However, news of the US introducing tariffs on Chinese electric vehicles raised the risk of a trade war, impacting the appetite for riskier assets.

US Consumer Inflation Expectations Signal Higher Inflation Environment

Later in the Monday session, US consumer inflation expectations increased from 3.0% to 3.3% in April. The US consumer inflation expectation numbers aligned with the Michigan Inflation Expectations Index, signaling an uptrend in consumer prices.

Following FOMC member concerns about the restrictiveness of monetary policy, sensitivity to US inflation data intensified.

Uncertainty about the Fed rate path affected the US equity market session. On Monday (May 13), the Nasdaq Composite Index gained 0.29%. However, the Dow and S&P 500 declined by 0.21% and 0.02%, respectively.

The Monday Market Movers

Infineon Technologies slid by 2.16%, with Zalando SE declining by 1.94%. Concerns about the influence of the Fed on the ECB rate path impacted buyer demand for tech and retail-linked stocks.

Bank stocks also ended the day in negative territory. Commerzbank and Deutsche Bank saw losses of 0.89% and 0.48%, respectively.

However, auto stocks had a positive start to the week. Volkswagen rallied 1.54%, with Porsche and BMW seeing gains of 1.42% and 1.33%, respectively. Mercedes Benz Group ended the session up 0.25%.

German Inflation, Economic Sentiment, and Corporate Earnings

On Tuesday (May 14), the German economy will be in focus, with finalized inflation and economic sentiment figures in focus. Revisions to the German inflation numbers need consideration. According to preliminary numbers, the annual inflation rate stayed at 2.2% in April.

However, a jump in the ZEW Economic Sentiment Index may drive buyer demand for DAX-listed stocks. Economists forecast the German ZEW Economic Sentiment Index to increase from 42.9 to 46.3. Upward trends in the ZEW Economic Sentiment Index would align with investor expectations of a pickup in economic activity.

Beyond the economic calendar, investors should consider corporate earnings results. Rheinmetall AG and Porsche are among the big names to release earnings results.

US Economic Calendar: Producer Prices and Fed Chair Powell

On Tuesday, US producer prices will warrant investor attention. Economists forecast producer prices to increase 2.2% year-on-year in April after rising 2.1% in March.

Hotter-than-expected inflation numbers could sink investor bets on a September Fed rate cut and impact market risk sentiment.

However, investors should consider Fed Chair Powell’s reaction to the numbers and comments on inflation and the Fed rate path. FOMC member Lisa Cook is also on the calendar to speak.

A more hawkish outlook on interest rates could also test investor expectations of a June ECB rate cut.

Near-Term Outlook

Near-term trends for the DAX will hinge on US inflation figures and central bank chatter. Hotter-than-expected US inflation numbers could affect buyer demand for DAX-listed stocks. Nevertheless, ongoing ECB support for multiple interest rate cuts may offset the effects of a more hawkish Fed rate path.

On the Futures markets, the DAX and the Nasdaq mini were down by 15 and 20 points, respectively.

DAX Technical Indicators

Daily Chart

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

A DAX breakout from the Friday (May 10) all-time high of 18,846 would support a move to 19,000.

Economic indicators from Germany, corporate earnings, US producer prices, and Fed Chair Powell need consideration.

However, a break below 18,700 could give the bears a run at the 18,500 handle. A fall through 18,500 would bring the 18,350 handle into play.

The 14-day RSI at 67.90 suggests a DAX return to the Friday all-time high of 18,846 before entering overbought territory.

4-Hourly Chart

The DAX sat above the 50-day and 200-day EMAs, affirming the bullish price signals.

A DAX return to the all-time high of 18,846 could give the bulls a run at 19,000.

Conversely, a DAX fall through the 18,700 handle could signal a drop to the 18,500 handle.

The 14-period 4-hour RSI at 75.42 shows the DAX in overbought territory. Selling pressure could increase at the all-time high of 18,846.