DAX Index News: Factory Orders Beat Expectations, Eyes on US Jobs Report Impact

Market Overview

On Thursday, September 5, the DAX slipped by 0.08%, following a 0.83% loss on the previous day, closing at 18,577.

Key DAX Market Movers

SAP and Infineon Technologies extended their losses from Wednesday, falling by 1.11% and 0.17%, respectively. Recession fears impacted the tech-related stocks.

Growth concerns also impacted demand for retail stocks. Adidas and Zalando declined by 1.11% and 0.75%, respectively.

German Factory Orders Beat Expectations

Germany’s factory order surprised the markets, rising by 2.9% in July after surging by 4.6% in June.

The upswing in factory orders delivered early gains amid hints of a possible improvement in the demand environment.

German Economic Calendar

On Friday, September 6, German industrial production and trade data will draw investor interest. A further increase in industrial production and improving trade terms could calm fears of a German recession.

Economists expect Germany’s trade surplus to widen from €20.4 billion in June to €21.0 billion in July. Upward trends in imports and exports supporting a larger trade surplus could fuel demand for DAX-listed stocks.

However, economists expect industrial production to decline by 0.3% in July, following a 1.4% rise in June.

US Labor Market and Services Send Mixed Signals

On Thursday, the ADP reported private sector employment increased by 99k in August, down from 111k in July. The weaker-than-expected numbers retriggered investor fears of a hard US economic landing (recession).

Weaker labor market conditions could affect wage growth, possibly curbing consumer spending. A pullback in consumer spending may impact the US economy as it contributes over 60% to GDP.

With Friday’s US Jobs Report crucial for the Fed rate path, the ADP numbers overshadowed positive jobless claims and Services PMI data.

Initial jobless claims fell from 232k in the week ending August 24 to 227k in the week ending August 31. The US ISM Services PMI rose from 51.4 in July to 51.5 in August.

Expert Views on the US Labor Market

Ahead of Thursday’s ADP Report, StoneX Market Analyst David Scutt emphasized the significance of the Report, stating,

“ADP has overstated private US nonfarm payrolls in three of the past four months. Should we see a weak ADP later today, it could point to a really weak NFP (even before BLS overstating concerns are considered).”

US Market Trends

The US equity markets had a mixed session on Thursday. The Dow and the S&P 500 saw losses of 0.54% and 0.30%, respectively, while the Nasdaq Composite Index advanced by 0.25%.

US Economic Calendar

On Friday, September 6, the highly anticipated US Jobs Report will be a crucial data release. Economists expect the US unemployment rate to fall from 4.3% in July to 4.2% in August. Tighter labor market conditions could support wage growth, fueling consumer spending and the US economy.

Easing fears of a US economic recession and support for a 25-basis point Fed rate cut could drive demand for riskier assets.

With heightened scrutiny of the US labor market, nonfarm payroll trends could also move the dial. Economists predict nonfarm payrolls to increase by 160k in August after rising by 114k in July.

Near-Term Outlook

Near-term DAX trends will likely hinge on the US Jobs Report. Positive US labor market data and support for a September Fed rate cut could push the DAX toward the September 3 all-time high of 18,991.

However, weaker-than-expected numbers could fuel economic recession fears, possibly dragging the DAX toward 18,000.

In the futures markets, the DAX and the Nasdaq mini were down by 21 and 73 points, respectively.

Investors should stay alert with central bank speakers and economic indicators likely to influence risk sentiment. Monitor the news wires, the economic calendar, and expert commentary to manage trading strategies.

Stay informed with our latest news and analysis to manage your risks effectively.

DAX Technical Indicators

Daily Chart

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

A break above 18,750 could give the bulls a run at Tuesday’s high of 18,991. Furthermore, a return to 18,991 could signal a move toward 19,250.

German industrial production, trade data, and the US Jobs Report require consideration.

Conversely, a drop below 18,500 could signal a fall toward the 50-day EMA. A fall through the 50-day EMA could give the bears a run at 18,250.

The 14-day RSI at 54.26 suggests a return to Tuesday’s high of 18,991 before entering overbought territory.